Not all projects initiated under the CDM actually made it to registration. While some failed in the initial phase, others were unable to meet the financial, political or regulatory criteria. This was often due to a lack of start capital or due to a lack of host country support. Another barrier was the complexity of the CDM whose implementation requirements were subject to constant change. Against this backdrop, the research project 'Analysing the status quo of CDM projects' commissioned by the BMU explored the question of what happened to the CDM projects that failed to make it into the CDM project cycle or left it prematurely.
The project examined the consequences of the collapse of the global carbon market. In particular, the issue of whether and to what extent registered projects could not be continued due to the market crash was to be explored. The analysis was not, therefore, limited to studying specific cases, but instead aimed to draw significant conclusions for the CDM as a whole. In a second step, the extent to which such stranded projects could be continued through alternative instruments, i.e. without the carbon market, was then elaborated. Here, the aim was to identify options and recommend action for continued international carbon market cooperation.
The results of the study prepared as part of the project show that there is a huge demand for greater, more-targeted support to enable continuation of CDM mitigation projects. Until the mitigation ambition of Parties has returned to a higher level, continued cooperation between market players on the demand side is needed in order to significantly improve market conditions in the short and medium term, and regain potential project developers’ trust. One option suggested by the study is the establishment of purchasing facilities to provide targeted, short-term support for specific countries and technologies.
International support could furthermore target the continuation and expansion of activities conducted under existing Programmes of Activities (PoAs), the study suggests. Since, according to the study, a critical mass of PoAs exists in many countries, a more effective form of support could be provided with targeted promotion of reduction potential under these umbrella PoAs while only second highest priority is given to the development of new PoAs.