The independent high-level panel established to take stock of the Kyoto Protocol's Clean Development Mechanism (CDM) has released its eagerly awaited recommendations by urging nations to intervene forcefully to address the crisis in the carbon market and substantially increase their level of ambition when it comes to reducing greenhouse gas emissions.

According to the high-level panel, if nations permit the CDM mechanism to disintegrate, the political consensus for truly global carbon markets may evaporate. Therefore, the panel calls on nations not only to increase their mitigation ambition but also to investigate the establishment of a new fund to purchase and cancel part of the current overhang of emission allowances held by countries under the Kyoto Protocol.

To address shortcomings and improve the mechanism's reputation and performance in the future, the Panel recommends fundamental reforms of the CDM's operating procedures. More specifically, the Panel calls for:

+ more systematic reporting, monitoring, and verification of sustainable development impacts;

+ greater access for under-represented regions through simplified procedures;

+ revised criteria for the composition of the CDM Executive Board (CDM EB) to reflect not only regional distribution, but also professional knowledge and experience;

+ implementation of standardized methods, such as performance benchmarks and positive lists, for assessing additionality.

In addition, the Panel urges nations to take measures to enhance the CDM's role so that it adapts to new political and market conditions. More specifically, the Panel recommends that:

+ new approaches, such as sectoral crediting or national REDD+ programmes, be implemented;

+ new projects that reduce HFC-23 or N2O from adipic acid plants be phased out;

+ robust standards to enable linking and harmonization of current and emerging carbon markets be set;

+ the rapid implementation of the Green Climate Fund be supported.

In formulating its recommendations, the high-level panel commissioned a wide-ranging research programme addressing 22 topics across three main areas: the impact of the CDM to date; the governance and operations of the CDM; and the future context in which the CDM could operate. It also organized a stakeholder consultation programme holding dozens of formal and informal meetings around the world.

The panel, which officially presented its report at the sixty-ninth meeting of the CDM Executive Board in Bangkok, urges that its recommendations be implemented fully and without delay with a timetable agreed that will bring them into effect by the United Nations Climate Change Conference scheduled for December 2013.

Report by the CDM Policy Dialogue