Developing institutions for the clean development mechanism (CDM): African perspectives

The clean development mechanism (CDM) requires developing countries to set up designated national authorities (DNAs). The DNA should be designed to both attract investment and to establish an effective regulatory framework for project approval—including assessment to ensure that CDM projects contribute to national sustainable development objectives. Since CDM investment flows to Africa are uncertain, however, countries cannot risk large investments in institutional infrastructure and need to build on existing institutions. This article examines the critical functions that a DNA has to fulfil, and outlines several institutional models. It concludes that models that minimize institutional cost by drawing on existing institutions for environmental impact assessment and promotion of foreign direct investment are likely to be the best starting-point for DNAs in many African countries. © 2005 Taylor & Francis Group, LLC.