CLEAN DEVELOPMENT MECHANISM (CDM): PROBLEMS AND PROSPECTS IN BANGLADESH

This article evaluates Bangladesh’s experience and potential with the Clean Development Mechanism during the late Kyoto era, focusing on both project-level bottlenecks and system-level reforms that could increase additionality and local benefits. It reviews the global CDM architecture—baseline methodologies, additionality tests, validation and issuance—then examines why Bangladesh’s pipeline concentrated in landfill gas, brick kilns, effluent treatment and small renewables. The paper analyses transaction costs, monitoring demands, and credit-price uncertainty that weakened incentives for smaller developers, along with domestic factors such as financing constraints, technology risks and limited Designated National Authority capacity. It also explores sustainable-development co-benefits: reduced local air pollution, energy efficiency gains and job creation. The core claim is that a re-tooled pipeline—aggregated programmes of activities, standardized baselines and concessional co-finance—can transform carbon opportunities into durable mitigation and development outcomes even amid volatile carbon markets.

The body opens with an overview of global CER price dynamics and their implications for investment horizons. Section One presents a typology of candidate sectors in Bangladesh, estimating abatement costs and barriers for brick firing, textile boilers, municipal waste, rice husk power and solar mini-grids. Section Two addresses MRV challenges: metering, data integrity and third-party verification that often overwhelm small projects; it proposes digital data capture and pooled verification services to cut costs. Section Three maps financing options—blended finance, development-partner guarantees and output-based aid—showing how they can de-risk early adopters. Section Four discusses governance: strengthening the DNA, fast-tracking no-objection letters, and aligning CDM selection with national climate strategies to prioritise high-co-benefit projects. Section Five looks ahead to post-Kyoto mechanisms and the emergence of voluntary markets, arguing that institutional learning from CDM can position Bangladesh to access Article 6 cooperative approaches. The conclusion stresses that credible pipelines, standardized documentation and community benefits will determine whether carbon finance catalyses scalable change.