Indeed, some elements of the equity agenda–primarily at the international level–have been incorporated into the emerging global climate policy regime. In particular:

• initial mitigation efforts have been concentrated in Annex I countries, resulting in a search for the most cost-effective solutions as detailed in Section 1.2;
• currently, non-Annex I countries are exempt from specific mitigation obligations;¹⁴
• there are agreements to provide financial resources to non-Annex I countries to cover the full cost of preliminary climate obligations (e.g., monitoring, reporting, and planning), and the incremental cost of voluntary mitigation actions;
• there are agreements and some programs to provide technical assistance and training to identify potential win–win opportunities;
• various voluntary mechanisms are being designed to induce early mitigation action in non-Annex I countries, most notably including the CDM of the Kyoto Protocol.

While the details of the CDM are still to be worked out, in broad terms it allows entities in Annex I countries to fulfil their mitigation obligations through co-operative investment in non-Annex I countries, presumably at a lower cost. It has been hailed by some analysts as an ingenious device to reconcile the goals of GHG abatement and sustainable development (see Goldemberg, 1998b; Haites and Aslam, 2000). On the other hand, it has also generated a degree of criticism. Critics fear that:

• CDM will channel investment into projects of marginal social utility (Agarwal and Narain, 1999);
• gains will not be shared fairly (Parikh et al., 1991, 1997a; Parikh, 1994, 1995);
• technology transfer will not be satisfactory (Parikh, 2000);
• poorer countries (especially African countries) and vulnerable groups will be excluded (Sokona et al., 1998, 1999; Goldemberg, 1998b);
• only resources for cheap mitigation options will be attracted (the so-called “low-hanging fruit”), leaving developing countries to undertake the more expensive options themselves (Agarwal et al., 1999);¹⁵
• CDM will lead to an effective relaxation of the emission caps (Begg et al., 2000; Parkinson et al., 1999), and
• paradoxically, it may compromise the capacity of developing countries to pursue sustainable development (Banuri and Gupta, 2000).

• Scale. The scale of the mitigation challenge in non-Annex I countries is projected to be much broader in the long term than the short term. Instead of an exclusive reliance on financial and technological assistance, which ordinarily indicates increases in assistance levels significantly above historical trends, there is a need to invest in indigenous capacity to undertake mitigation without compromising the development agenda.
• Timing. To sustain the interest of both developed and developing countries in co-operative solutions, the goal must be to lower the cost of mitigation over time rather than to concentrate simply on exhausting the cheap mitigation options (the so-called “low-hanging fruit”).
• Relevance to economic growth and sustainable development. Recent studies of the impact of foreign resource inflows demonstrate that these flows alone do not suffice to promote economic growth or sustainable development without appropriate policy and institutional environments (World Bank, 1998). It is not clear whether financial resources alone will lead to climate mitigation and economic growth.
• Equity and trust. Despite consistent and repeated references to equity in climate agreements, sceptics remain wary that equity will eventually be subverted in some way and involuntary obligations imposed on non-Annex I countries (without financial compenzation) to force them to bear a disproportionate burden of mitigation (Agarwal and Narain, 1991a; Hyder, 1992; Parikh, 1992; Dasgupta, 1994; Parikh, 1995; Parikh and Parikh, 1998; Agarwal et al., 1999).¹⁶

Some scholars propose remedies to reconcile these longer-term concerns with the more immediate goals of the existing agenda. The simplest is a proposal to restrict all co-operative measures–and thus all early and voluntary action in non-Annex I countries–to “non-carbon” projects (Agarwal and Narain, 1999). While this would exclude some legitimate mitigation options from the purview, it could channel research and entrepreneurial resources into a new market, bring down unit costs, create and strengthen technical and managerial capacities, and thus enable both developed and developing countries to engineer a transition to a carbon-free future. Renewable energy projects have been implemented at smaller scales, which make them appropriate for poor rural communities. Other proposals similarly address the potential co-benefits of the protection of primary forests (see Kremen et al., 2000).

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