The Clean Development Mechanism and Environmental Protection in Rapidly Developing Countries : Comparative Perspectives and Lessons from China and India

The Clean Development Mechanism (CDM) was adopted as one of the greenhouse gas mitigation measures in the Kyoto Protocol. Apart from promoting environmental sustainability and other ecosystem benefits, the CDM projects also ensure the transfer of technologies and sustainable growth in the host country through prioritizing projects such as clean energy production and conservation as well as waste treatment. China and India together account for over 70% of the CDM projects in the pipeline. Meanwhile, China and India are the most environmentally polluted countries in South Asia according to current statistics. This demonstrates that a multitude of CDM projects in these countries are not yielding corresponding benefits especially in protecting and sustaining ecological treasures. Using comparative analysis, this article discusses the progress made in China and India in terms of policy development and highlights the policy implementation challenges hindering CDM projects from achieving clean and green development. The article shows that although both countries have taken positive steps through the adoption of enabling policies and institutional structures, the twin-forces of incoherent policies and poor institutional designs are impeding the success of CDM projects. This article contends that China and India must share their best practices in the areas of environmental protection and CDM governance to guarantee that CDM projects lead to ecologically sustainable development. Lastly, the article emphasizes how potential policy and institutional reforms to the existing environmental and CDM regulatory mechanisms in China and India would remedy identified deficiencies to achieve the intended sustainable targets sought by the CDM