Yvo de Boer, BBC Green Room 9 Jun 08;
Negotiators from more than 172 countries are meeting in Bonn to hammer out a deal that may culminate in a new global climate agreement. In this week's Green Room, UN climate chief Yvo de Boer argues that negotiators want to see more of the Kyoto Protocol's Clean Development Mechanism, not less.
When countries gather for UN climate change negotiations, they meet to respond to what can arguably be described as the greatest challenge ever to face humanity.
The prospect of rising sea levels, ever more incidences of drought and flooding, along with water and food shortages for billions of people, are monumental threats.
The extent to which greenhouse gas emissions can be reduced will determine our future, that of our children, and of generations to come.
Designing a new international climate change agreement, possibly the most complex and most ambitious ever conceived, is a tough task.
Delegates meeting this week in Bonn are looking at how to provide the clever financial architecture that will enable countries, not least those developing rapidly, to green their economic growth and avoid the mistakes made by the developed world.
Whilst a new agreement is currently being negotiated, the Kyoto Protocol is already up and running. It already provides part of the blueprint of the "Copenhagen outcome", the agreement that negotiators are hoping to achieve when the Danish capital hosts the annual UN climate summit in 2009 .
For example, the protocol's Clean Development Mechanism (CDM) allows industrialised countries to generate emission credits through investment in emission reduction projects in developing countries. This measure is in addition to the implementation of climate-friendly policies at home.
The CDM has managed to create an internationally recognised currency for trading emission cuts: the Certified Emission Reduction (CER).
Each CER is equivalent to one tonne of carbon dioxide, and it has brought the power of the market to bear on the problem of climate change, engaging the private sector in the developed and developing world.
Around two billion CERs are expected to be generated by the end of the first phase of Kyoto in 2012.
CDM renewable energy and energy efficiency projects registered in 2006 alone are expected to result in $5.7bn (£2.9bn) of capital investment.
This is about three times the official development assistance available for energy policy and renewable energy projects in the countries in which CDM investments took place; and almost as much as private investment in renewable energy and energy efficiency in those countries.
More than hot air
In recent times, journalistic reports and academic studies have been questioning the "additionality" of CDM.
The issue is whether sustainable development projects would take place without the incentive of carbon credits.
The reports claim that project developers often don't need the incentives of carbon credits to shift towards clean technologies, and they criticise the high profits that can be made with some types of project.
The CDM project type expected to generate the most CERs at this point in time is the destruction of the gas trifluoromethane (HFC-23), which is a waste product from the manufacture of a refrigerant gas.
HFC-23 is 11,000 times more potent than carbon dioxide in terms of its ability to trap heat in the atmosphere.
Whilst substantial profits can be made, it is crystal clear that without CDM there is absolutely no financial incentive for HFC-23 to be incinerated, and that large amounts of the gas have been destroyed thanks to the mechanism.
Considering that CDM was designed to employ the strengths of the market to identify low-cost opportunities for emission reductions, it is not surprising that these low-hanging fruits were picked first.
But allegations of genuine flaws in and abuse of the system are taken extremely seriously by the Executive Board, which oversees the mechanism, and by all the countries that are party to the Kyoto Protocol.
On the one hand, countries are constantly looking at how to improve the mechanism, which involves permanent readjustments of the rules and regulations, along with the measures that determine what sort of project can and should be brought inside the scope of the CDM.
Just as importantly, countries are also looking at the mechanism's scale and scope, effectiveness, efficiency and accessibility.
Perhaps even more importantly, the CDM has already achieved significant emission reductions, but it has the potential to do much more when applied not only to individual projects, but to groups of projects, programmes and possibly even to entire sectors of the economy.
Negotiators are clearly indicating that they want to see more of the CDM, not less.
Parties to the Kyoto Protocol only recently agreed that the mechanism would continue beyond 2012, which is the year that the CDM's first commitment period expires.
The challenge is now to design a deal that will deliver the type of emission reductions that the scientific community tells us are urgently needed.
With hardly more than a year of negotiating time left to design the Copenhagen agreement, there is a great sense of urgency to move forward.
What exactly will be written into the agreement remains to be seen, but it is clear that expanded, market-based mechanisms will play a central role.
Yvo de Boer is executive secretary of the United Nations Framework Convention on Climate Change (UNFCCC)
The Green Room is a series of opinion pieces on environmental topics running weekly on the BBC News website
