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Climate change is a well-known concern of nowadays. Its impacts involve the entire globe, asking for a serious international cooperation to fight a rapid worsening. Many treaties have been made by the states but a special tool, the Clean Development Mechanism (CDM), is the only one, under the Kyoto Protocol, which involves countries not included in binding greenhouse gases emission caps (the so-called non-Annex I countries). The starting point in promoting this mechanism was rewarding states and non-state actors for saving greenhouse gases emission with carbon pricing. The clean development mechanism also allows developed countries to invest in low-carbon projects in developing countries, to reduce emissions in those territories and to help industrialized States fulfill their own emissions reduction commitments. Once registered, a project issues a certain amount of Certified Emission Reductions (CERs) corresponding to the verified emission reductions to the project participants through the CDM registry. Thus, if the CDM relies on economic support (trade of carbon credits), it serves non-trade objectives. Despite the success of this investment incentive, some developing countries, such as Bolivia and Venezuela, oppose market mechanisms. The critical countries question the environmental effectiveness of the CDM itself, since it does not reduce emissions but rather offsets the increase in emissions elsewhere. On the other hand, China requests that the members make developed countries’ access to CDM depend on their individual commitment. On the one hand, the clean development mechanism helps to assist developing countries to achieve sustainable development, while on the other hand, it makes Annex I countries able to achieve their emission reduction targets cost-effectively. Around 7,596 projects have been registered in 2016, with an extraordinary growth during the period 2010-2016. What is worth noting is that the CDM can be used not only by States but also by private firms. Despite ever-growing uncertainty about the 2012–2020 period, the CDM shows a high degree of resilience, with additional projects consistently entering the pipeline and the CERs issuance on the rise. The majority of projects (74.53 percent) occur in energy industries, while the second largest category of projects tackles waste handling and disposal (10.92 percent). The next two largest categories are agriculture (2.44 percent) and avoided afforestation/reforestation (0.61 percent). Most of CDM projects focus on renewable energy. Nevertheless, many deficits in the CDM’s ability to fulfill its goals are often pointed out. If the effectiveness of global environmental protection is not denied, the CDM consistently needs to improve the quality and quantity of its emissions reduction. It is clear that the repartition of CDM projects is geographically unequal between regions of the world and among States. According to the UNFCCC Executive Board Annual Report of 2013, for example, Asia and the Pacific benefited from almost 84.25 percent of CDM projects, and Latin America and the Caribbean housed 12.72 percent. The African States have only 2.40 percent of total projects, and Eastern Europe profits from only 0.62 percent. Africa’s share of CDM projects spells clear underrepresentation, and 19 African States host no CDM projects at all. It happens because investors see emergent States as more secure than less economically dynamic States. In addition, the institutional and infrastructural capacity of States and domestic capital availability largely determine the investments flows.
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