CDM and its development impact: the role and behaviour of the corporate sector in CDM projects in Indonesia
This chapter reviews Clean Development Mechanism (CDM) using the evidence from Indonesia's participation. It explores the role of the private sector in the CDM process and the manner in which this has influenced the type of CDM projects that have been developed. The chapter explains the benefits that have accrued to Indonesia from these projects and the wider implications for sustainable development in Indonesia. There are two major drivers for private sector involvement in CDM projects: Government regulations and incentives and motivations within the private sector. Reflecting on the current status of CDM project development in Indonesia, it is clear that the Indonesian government needs to do much more to encourage the private sector to play a greater role. Overall, risks have limited the number of CDM projects in Indonesia and have resulted in a pattern where most of the projects have been developed by bilateral/multi-lateral carbon funds and carbon financing companies rather than by the private sector more generally.