How ‘sustainable’ is the ‘sustainable development objective’ of CDM in developing countries like India?

The rural poor and landless require resilient, sustainable livelihood systems that are flexible in the short term due to dependence on multiple products. The Kyoto Protocol requires that Clean Development Mechanism (CDM) projects result in long-term benefits related to the mitigation of climate change. This long-term requirement to keep carbon in storage may conflict with the short-term needs of the poor. The objective of this paper is to examine the potential implications of the Land use change and forestry (LUCF) projects to the rural livelihoods in India. For this purpose the paper uses a linearised version of the almost ideal demand system (LA-AIDS) to analyse data collected from 69 206 rural households in India. Based on the analysis, the paper concludes that for CDM to be sustainable and result in sustainable development of the local people, three important criteria should be satisfied: (1) Integrating the energy substitution possibilities in the objectives of carbon sequestration; (2) Management of the CPR lands by the rural poor through proper design of the rules for sustenance of user groups; and (3) Ensuring that the maximum revenue from carbon sequestration is channelled to the rural poor. Otherwise CDM would just result in either leakage of carbon benefits or have negative welfare implications for the poor.