Introduction

The Clean Development Mechanism is a flexible instrument that the United Nations Framework Convention on Climate Change ¹ (UNFCCC) offers to the countries that have signed and ratified the Kyoto protocol. This mechanism gives Annex-I ² countries the possibility to implement project activities to reduce emissions of greenhouse gases (GHGs) in non Annex-I countries. The CDM mechanism has two purposes: (a) reducing the overall emissions of GHGs into the atmosphere, and (b) assisting the developing countries hosting CDM project activities in achieving sustainable development. After validation of the project and certification of the GHG emission reduction, the project activities generate Certified Emission Reductions (CERs) which can be used by Annex-I countries to meet their domestic emission targets. In this way Annex-I countries have an extra tool at their disposal to comply with their Kyoto commitments (http://unfccc.int).

As I already pointed out, the second goal that the convention wants to achieve through the CDM is that Annex-I countries assist non Annex-I countries in achieving sustainable development. However, the CDM rules do not contain any definition of what sustainable development is. Countries hosting projects activities must unilaterally define what they understand under sustainable development and whether projects assist them in achieving it or not. As the rules of the CDM state: it is the host countries' "prerogative to confirm whether a clean development mechanism project activity assists in achieving sustainable development" (http://unfccc.int). Since the eradication of poverty is accepted to be an essential aspect of sustainable development, how host countries define sustainable development and how they include poverty alleviation in this definition are issues that deserve analysis. It is my opinion that the national characteristics of host countries play an important role in the sustainable development and poverty alleviation outcomes of the CDM. The way national institutions interact with the CDM rules may determine which poverty reduction outcomes are delivered.

While a large part of the literature on CDM focuses on the economic and technical feasibility of the mechanism and on its potentiality for the abatement of GHG emissions, a more reduced part of it is concerned with issues related to its contribution to sustainable development. Since this has received less attention than other aspects, it is my intention to place this work within this realm. Thus, the purpose of the present work is assessing the capacity of the CDM to alleviate poverty. Therefore, the main question that will be answered is the following: what is the capacity of the CDM to assist non Annex-I countries in achieving poverty alleviation? For the sake of building a consistent argumentation, the role that different national institutional environments play in this process will be given special attention. The study of three country cases: Argentina, India and South Africa, will bring some geographical perspectives to the discussion.

Section one will put the CDM into context by providing a clear outline of the historical evolution of the mechanism within the negotiations of the convention. This will be shortly discussed in order to understand why the sustainable development goal came to existence.

Section two will explain in which way the CDM can be related to the reduction of poverty by linking the mechanism with some theoretical reflections on sustainable development and poverty alleviation. Since many of the projects are directly related with the use of renewable energy sources, and this is commonly accepted as one of the ways of achieving sustainable development on the long run (Mendis & Openshaw 2003, p.190), the importance of energy for the eradication of poverty, and how the CDM gets a place in this discussion, will be discussed.

Section three will address the influence CDM institutions can have in the poverty reduction outcomes of the projects. A brief account of the projects life-cycle will be given. Hence, it will become clear how projects work, which parties are involved, and in what stage of the project the concept of sustainable development plays a role.

Section four will be dealing with the country cases of Argentina, South Africa and India. The Designated National Authorities (DNAs) are the governmental agencies of departments that handle all the matters relating to the CDM. Since they are the ones that have to decide whether projects assist in achieving sustainable development, a closer look at the DNAs of the respective countries will be given. In order to provide a more complete overview of the per country CDM contribution to poverty reduction, comments will be given on some registered and ongoing project activities in the concerning countries.

Finally the concluding section will shortly bring all the given arguments together in order to assess the capacity of the CDM as a tool for poverty alleviation.

Different resources have been used in order to gather the information needed to build up this paper. Articles from scientific journals dealing with the environment and development, climate policy and mitigation and adaptation strategies have been the main tool used for the theoretical considerations and for putting the CDM into context. The internet has been also a powerful source of information. The website of the UNFCCC and the websites of the DNAs of the particular countries have provided relevant information about the national sustainable development requirements as well as about the already registered and implemented projects. The websites of the relevant NGOs dealing with the CDM and development issues have also provided valuable information about the position and influence of civil society groups in this discussion.