Clean Development Mechanism (CDM) Business in Pakistan: Perceptions and Realities

Kyoto Protocol of the United Nations Framework Convention on Climate Change (UNFCCC) is a milestone towards global carbon mitigation efforts which resulted in the establishment of carbon markets. Pakistan has ratified Kyoto Protocol in 1997 and implemented it in 2005. It contributes towards carbon mitigation in the form of Clean Development Mechanism (CDM). This market based mechanism is instituted to facilitate the greenhouse gases lessening through carbon trading. Present study is a policy paper and intends to investigate the status of CDM business (carbon trading) in Pakistan. Specifically paper covers the policy related issues of CDM in the light of existing practices, business created by carbon trading, obstacles in optimising the benefits, and loopholes in CDM policy at national level. Analysis is based on the empirical investigation of CDM business in Pakistan in the backdrop of its progress in developing region (Annex-II). Study has revealed very interesting insights to assist the CDM related policy in Pakistan. Moreover, it highlights the main issues related to CDM business. Analysis proposes few policy measures to eradicate the problems and boost the carbon trading in Pakistan.