CDM Market Support Study

Published: 22/07/2013

The Clean Development Mechanism (CDM) suffers from a price level for certificates that went down to almost zero in a period less than a year. Additionally, no short-term price recovery is expected which could incentivise new projects. A risk is that market participants leave the market and the valuable CDM knowledge base on GHG mitigation and quantification will be lost.

The CDM Market Support Study analyses the actual price vulnerability of projects and identifies various financing and project type opportunities for project developers and for (institutional public) investors who intent to support the CDM project continuation and the further development of the CDM framework.

The study also shows how the current regulatory framework of the CDM can be maintained by transferring it to future mechanisms. This could be a chance to develop the CDM from a pure market-based instrument towards an integrated part within future market-based and also policy-based instruments. The CDM can provide useful components to currently discussed or tested instruments such as the NMM (New Market Mechanism), the FVA (Framework for Varios Approaches), NAMAs (Nationally Appropriate Mitigation Actions) or results-based financing approaches.

The study was financed by the German KfW-managed “PoA Support Centre”. The aim of the PoA-Support-Centre Germany is to support the development of Programmes of Activities (PoAs) under CDM and JI (Joint Implementation) worldwide.