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[NEW DELHI] A leading Indian nongovernmental organisation has called for a complete overhaul of the clean development mechanism (CDM), saying it focuses more on the market than tackling climate change.

CDM is a mechanism that allows developed countries to invest in projects that reduce carbon emissions in developing countries and claim them against emissions targets under the Kyoto Protocol.

"CDM is a market mechanism, not climate action," Sunita Narain, director of the Delhi-based Centre for Science and Environment, told reporters yesterday (5 December). 

Narain said that the biggest flaw in CDM is that it is aimed at the cheapest reduction methods for industrialised countries. There has been no transfer of high-end technologies from the rich to poor countries, or investment in clean coal technologies for poor countries, she said.

By the end of 2005, rich countries could not cut their emissions any further, and instead chose the CDM route to meet their Kyoto commitments. Narain said that in the process, large companies, traders and consultants have taken over the market in developing countries, offering the cheapest technologies to quickly earn credit for reducing emissions.

The focus is on earning credits rather than making genuine efforts toward cleaner technology or energy, she said. For instance, there are few projects on solar energy, wind energy, high-end clean coal or forest planting in the activities available under the CDM.

She said certain clauses in the current CDM framework are providing disincentives for governments in developing countries to create policies for clean energy production.

For example, technology projects need to be 'additional' to projects already running in a developing country to qualify under the CDM. India, for instance, already has a programme on renewable energy, so any further renewable projects are not counted as part of the CDM.

Narain said one of the foremost tasks at the UN climate change conference in Bali, which began this week (3 December), should be to "reform and reinvent" CDM to make it more effective.

She suggested a system of equal, per capita emission entitlements so that the rich reduce their emissions and the poor do not go beyond their climate quota.