IILJ Emerging Scholars Paper 5 (2007)

Delegation to Private Actors: A Case Study of the Clean Development Mechanism

Jessica F. Green

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This paper offers an in-depth study of the Clean Development Mechanism of the Kyoto Protocol.  The complex institutional design of the CDM creates delegates considerable authority to non-state actors, which raises important questions about their performance and accountability.  The study presented here evaluates how well the Executive Board of the CDM is able to control the agents to whom it delegates authority.  To answer this question, I conduct an analysis of 752 projects submitted to the Executive Board between December 2004 and June 2007.  The results are of this analysis are mixed.  Although many of the oversight procedures in place appear to be functioning well, there are some fundamental structural issues that may contribute to agents acting in rent-seeking ways, to the detriment of the principals.  The data indicate that although the CDM was designed in a way to maximize the Executive Board’s control, in practice, we cannot be assured that these private agents are not pursuing their own goals, at the cost of those delegated to them.