Stretching Too Far? Developing Countries and the Role of Flexibility Mechanisms Beyond Kyoto

In light of the recently launched negotiations on the future of the international legal framework addressing global climate change, it is important to understand the effectiveness of elements of proposed legal architectures. This Article focuses on a potential key element of a future climate regime, namely market-based flexibility mechanisms. The current functioning of flexibility mechanisms can be criticized on a number of grounds. In particular, this Article argues that the use of these mechanisms does not sufficiently take into account the interests and circumstances of developing countries. It outlines a range of concerns with respect to the use of flexibility mechanisms in general, and the Clean Development Mechanism (CDM) in particular. It argues that although flexibility mechanisms have certain virtues, they are not necessarily the best means to meet the various objectives and principles of the climate regime. Alleviating these concerns will be a key challenge in broadening participation in a future international climate change agreement. Therefore, the Article presents and discusses a number of suggestions on how to address these concerns in a future climate change treaty, and identifies the challenges in doing so. It concludes that although flexibility mechanisms are likely to remain a part of any future agreement, there are ways to address developing country concerns, in particular through reforming the CDM. However, doing so requires making new tradeoffs. Greater involvement of developing countries in the use of flexibility mechanisms by extending the coverage of international emissions trading to developing countries will require more fundamental changes to the design of the legal architecture of flexibility mechanisms