The impacts of global warming threaten to undermine the core objectives of sustainable development: Large-scale investments that aim to reduce greenhouse gases (GHG) are indispensable. A just low-carbon transformation requires that mitigation investments seek to generate sustainable development (SD) benefits while also minimizing their adverse effects. A central goal of the United Nations Framework Convention on Climate Change (UNFCCC) is alignment of the climate and the sustainable development agendas. Governance and operational structures of policy instruments and funds should attempt to prevent local communities being confronted with the impacts of both climate change and climate protection measures.
This briefing paper begins by analysing how activities under the Clean Development Mechanism (CDM) both positively and negatively impact sustainable development. It then compares these experiences with emerging climate governance approaches by examining the Warsaw Framework for Reducing Emissions from Deforestation and Forest Degradation (REDD+) and the Green Climate Fund (GCF).
Key conclusions:
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Activities under the CDM have both positively and negatively affected sustainable development, depending on the type and local circumstances: Community-based activities regarding energy access reap high benefits for sustainable development and large-scale hydropower and reforestation projects can create negative impacts
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the CDM requires stakeholders to be consulted at the beginning of the project design but does not include international safeguards to prevent ongoing activities harming local communities
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more recent financing instruments and investment frameworks such as the GCF and REDD+ have begun to formulate additional regulatory frameworks to promote sustainable development and avoid harmful side effects. While these frameworks still must be tested in practice, the GCF stipulates verification of sustainable development impact and mechanisms for independent redress
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the future of a reformed CDM for financing climate protection and sustainable development depends on political decisions. However, the CDM offers critical insights for designing a new generation of multilateral climate finance mechanisms. Post-2020 mechanisms should create strong and harmonized standards to help align the sustainable development agenda with climate protection