We have previously pointed out the need to involve developing countries more directly in climate change mitigation measures. Energy demand in developing countries is expected to at least double in the next 20 years which shall result in significant increase in greenhouse gas emissions (Nakicenovick et al., 1998). The dynamics of well-established industries and fuel markets shall strongly influence the evolution of energy generation and its use in developing countries in the medium term, leading to an overall increase in the utilization of fossil fuels and, consequently, more emissions from these countries.

However, there are opportunities for developing countries to take a different direction. Already today, medium-income countries are moving towards larger energy efficiency and increased utilization of combustible renewables and waste (Sun, 2003; Miketa, 2001). Liberalization of energy markets and various national policies have already led to significant savings of emissions in fast-growing develop­ing countries such as Brazil, India and China. These countries already constitute important markets for clean technologies. Therefore, it is important that, as new investments are made in the expansion of energy supply infrastructure in developing countries, renewable systems be given high priority and sustainability criteria be observed. In this context, CDM can contribute as a channel to attract capital aimed at clean technologies that contribute to socioeconomic development, thus meeting both global environmental interests and development priority needs.

The CDM can provide a bridge for increased collaboration between industria­lized and developing countries to shift energy systems towards sustainable and renewable systems. The mechanism can be used to promote renewable energy technologies and energy efficiency, reducing costs and risks and channeling investments to developing countries. To make that possible, public and private efforts have to be made jointly. The support of civil society at large is, obviously, also a prerequisite for succeeding. Therefore, stakeholder dialogs have to take place along the whole project cycle (Baumert and Petkova, 2000).

Table 12.1 summarizes the main advantages and potential barriers that different actors may find when considering involvement in CDM projects. Why should they participate in CDM? What may cause them to refrain from doing it? We have defined the actors in broad groups, differentiating among governments in industrialized and developing countries because of their different position in terms of commit­ments within the Kyoto Protocol. We have also differentiated companies by size,

separating corporations from small- and medium-sized enterprises (SMEs). SMEs can be quite different in nature depending on size, sector, type of product or service provided and even geographic location so that the advantages and barriers indicated for this group should be seen as a very broad generalization.

When it comes to financial organizations, Chapter 13 presents particular insights that complement the list in Table 12.1. We have made a distinction among inter­national and national NGOs because of their different role in the context of CDM projects. International NGOs may have a particular impact on the development of methodologies and procedures for CDM implementation, making sure that the mechanism evolves into an effective way to facilitate the reduction of greenhouse gas emissions and to promote sustainable development. National NGOs play a role in following up the work at the local and national levels and making sure that CDM projects are really in line with the host country’s sustainable development strategies. A stronger link between national and international organizations is desir­able to enhance capacity building and favor resource allocation to ensure a moni­toring role at national and international levels throughout the implementation of projects.