Legal issues for implementing the clean development mechanism in China

Today, climate change is among the most hotly-debated topics worldwide. The Clean Development Mechanism (CDM), one of the three financial mechanisms under the Kyoto Protocol open to developing and developed countries, was devised to assist in mitigation of global warming. Since it was initiated, thousands of CDM projects have been carried out. China, in particular, with its large carbon emission potential and favourable investment environment, has dominated the global carbon market through participating in CDM projects and has become the largest beneficiary. However, despite the significant benefits the CDM has brought to China, many barriers and problems are still encountered in the practical implementation of CDM projects. Moreover, as the first Kyoto period is set to expire in 2012, China, as a major emitter and developing country, will play a crucial role in combating global warming in the post-2012 period. Therefore, it will be under considerable pressure to reduce carbon emissions without undermining its economic development. The central aim of this thesis is to discuss what China should do to make full use of the CDM to promote sustainable development and meet the challenge of climate change from a legal perspective. First, how the CDM contributes to sustainable development in China is explored on the basis of the current situation of CDM projects. Following this, the existing barriers and problems encountered in the practical implementation of CDM projects are indentified, based on a field work study. Finally, how the CDM would contribute to assisting China in dealing with climate change beyond 2012 is analysed. Based on this analysis, the thesis comes to a conclusion that the CDM has limitations in promoting sustainable development in China and thus should be regarded only as a complementary instrument in combating climate change. Legal strategies for improving the implementation of CDM projects under the legal framework in China are thus put forward and some proposals for China to meet the challenge of climate change in the post-2012 era are made.