Many CDM activities attracted criticism on account of their poor contribution to sustainable development and their dubious environmental integrity. Their social compatibility was often placed in question. Host country populations affected by the projects often have little influence on how they are conducted and are rarely able to lend their voice to the international debate.
CDM Watch was launched with financial support from the BMU to act as a controlling body to monitor the undesired effects of the CDM. The idea behind CDM Watch was to empower sections of society in selected host countries to enable them to influence how projects are conducted, have a voice in the international debate on the design of the flexible mechanisms and represent their interests both nationally and internationally. The project thus helped to improve the environmental and sustainable development benefits arising from the CDM.
A focal point of the work performed by CDM Watch involved providing support for societies in the Global South. CDM Watch had repeatedly revealed inadequate regulations and practices there. It organised capacity-building workshops to target populations in India, China, Brazil, South-East Asia and Mesoamerica. CDM Watch also supported national organisations in the host countries to help them better prepare for the challenges faced in local stakeholder consultations.
Under the UN Framework Convention on Climate Change, CDM Watch strived to improve the environmental and social integrity of UN offsetting schemes. At key UNFCCC conferences and at meetings of the CDM Executive Board, it voiced its concerns regarding inadequate regulations and CDM projects with negative effects, and submitted recommendations for improvement. In particular, the disclosure by CDM Watch of the “perverse incentives” in HFC-23 destruction projects attracted huge attention.
The work performed CDM Watch led to an improvement in the regulations for local stakeholder consultations, heightened the role of sustainable development in the CDM and, in this context, brought attention to the importance of human rights. Other campaigns focused on CDM activities involving coal-fired power plants, forestation and other land-use forms, and hydropower.
In addition to its function as an interests and control group, CDM Watch brought more than 800 civil society organisations from developing countries together as members of the CDM Watch network. The network provides a platform for the exchange of information concerning CDM policy trends, draws attention to opportunities for public input in the project validation process and offers mutual support in issues concerning local stakeholder consultations.
CDM Watch was funded as part of the International Climate Change Initiative operated by BMU. The allocated funds helped get the project off the ground. CDM Watch has since broadened its focus to take in a wider range of carbon market initiatives. In November 2012, CDM Watch was reformed under the name Carbon Market Watch and its work now focuses on yet other initiatives such as new market mechanisms, the EU Emissions Trading Scheme (ETS), Joint Implementation, emissions trading and REDD+. Carbon Market Watch now operates independently and no longer receives funding from the German government.