The Clean Development Mechanism Worldwide and in Brazil - Implementing Environmental and Resource Management - page 72

two have been accepted in the Bonn Agreement and the Marrakesh Accords: Envi-
ronmental and financial additionality. In other words, a CDM project has to in-
clude processes and practices that are superior to the current standards and that go
beyond existing laws and regulations. Furthermore such activities may not be
funded by public finances on an existing regular basis. On the other hand, there
has been consent neither for criteria regarding investment additionality, referring
to private financing, nor for criteria dealing with technological additionality.

8.3.2. Sustainability and Distribution

While sustainable development is one of CDM's aims, no precise sustainability
criteria for projects have been agreed so far. The decision on the sustainability of a
project is in the hands of the host country, who are not required to state a reason
for the decision. Such imprecise criteria for projects may bear the risk of a “race to
bottom” between host countries in order to attract more projects (Sutter and Par-
reño 2005). Inequitable global distribution of CDM activities is likely to increase
this risk. While more than 95% of the projects are located in Latin America and
the Asian-Pacific region, only a few are located on the African continent. The four
leading countries ( Table 8.1 ) China, India, Brazil and Mexico host more than 75%
of all projects, responsible for 78% of emission reductions. India attracts 30% of
the CDM projects, followed by China (24% of projects). Furthermore, China alone
is responsible for 53% of all emission reductions achieved by projects under the
Clean Development Mechanism, as it hosts several projects aimed at the reduction
of methane and other Kyoto greenhouse gases with higher CO 2 -equivalents.
The attractiveness of host countries is strongly related to the market for tradi-
tional foreign direct investments. This following of pathways traditional for for-
eign direct investments might lead to the impression that some of these FDIs are
“green washed” by the help of the Clean Development Mechanism. Therefore,
particularly in countries with a rather low attractiveness, the risk of lowering sus-
tainability criteria seems to be potentially high. Jung (2005) highlights that even a
further CDM capacity building in less attractive countries might only be a short
term response. Due to the market based strategy, Jung (2005) raises the question
of whether it would be more appropriate to distribute the opportunities under the
Clean Development Mechanism more equally.

Table 8.1. Global distribution of CDM activities (Source: UNEP Risoe Centre 2008)

Country Amount of Projects Emission Reductions

China 24.1% 53.0%

India 30.1% 13.6%

Brazil 12.2% 8.5%

Mexico 8.9% 3.3%

Others 24.6% 21.7%