Is the clean development mechanism promoting sustainable development?

One of the dual objectives of the Clean Development Mechanism (CDM) of the Kyoto Protocol is to promote sustainable development in the host countries. With different CDM indicators for 58 CDM host countries over 2005-10, this paper empirically assesses whether CDM project development fulfils this objective of sustainable development. Using a unique dynamic panel data method based on long-differences of the model, this research provides evidence in support of significant contribution to sustainable development of CDM projects in the host countries. It sheds light on the role of CDM projects in the process of sustainable development with clear policy implications for developing countries and the wider world.