ABSTRACT
The Clean Development Mechanism (CDM) was the largest international climate change mitigation program that China participated in. This chapter investigates the impacts of CDM on China's climate change mitigation and sustainable development by analysing two types of energy-related CDM projects: renewable energy projects and energy saving and emission reduction projects. Both targeted the long-lasting greenhouse gas CO2. These projects, although they did not directly contribute to China's emission reductions, brought China a range of practical benefits. These included raising business awareness of climate change, stimulating renewable energy development, and introducing the concept of carbon market and carbon offsetting which China used later in its pilot and national carbon trading scheme. Overall, CDM was more beneficial than detrimental to China's low-carbon development goals. The Chinese Certified Emission Reductions (CCERs), based on CDM, were already incorporated into China's carbon trading pilot program and were confirmed to have a definite role in China's national carbon trading scheme. However, there were two issues that needed to be addressed, namely the financial difficulty of small CDM renewable energy projects caused by domestic banks' reluctant lending and the concern over the exhaustion of China's low-carbon abatement opportunity.
