Lessons from Gulf Cooperation Council countries’ participation in the Clean Development Mechanism

This study fills a gap in the literature on international carbon markets by identifying lessons learned from Clean Development Mechanism (CDM) projects developed in the Gulf Cooperation Council (GCC) member countries. The study addresses two objectives: it documents the GCC region’s experience with the CDM and related project development, and it identifies related lessons that can help the region re-engage with carbon markets in the Paris Agreement era. The study draws from the literature on the CDM, publicly available CDM project data, and regional stakeholder accounts. The latter, which comprise 17 semi-structured interviews with regional and international carbon market stakeholders, constitute the major empirical component and novel contribution of the study.The article starts with a brief review of global and regional CDM literature, focused on distilling lessons learned from past experiences. This is followed by a quantitative overview of registered CDM projects in the GCC region and a comparison of the GCC’s experience with that of other countries. The article then presents an analytical summary of the results of the stakeholder interviews, starting with documenting stakeholder experiences and followed by distilling lessons learned from CDM project development in the GCC region. The article concludes with a discussion on the implications for GCC countries’ future participation in carbon markets.The study confirms the critical role of government leadership in paving the way for businesses to engage successfully and meaningfully with crediting markets. The main lessons identified by the study include the importance of: 1) entering early into the market; 2) ensuring sufficient credit price levels for project developers; 3) providing constant government support, facilitation, incentives and transparency to the market; and 4) raising awareness and fostering specialized expertise.Government leadership plays a critical role in scaling up crediting markets.Building on insights from the GCC region’s experience with the CDM, the following factors will be essential in fostering active corporate engagement in crediting markets going forward: ensuring sufficient credit price levels for project developers; providing sustained government support, facilitation, incentives and market transparency; and raising awareness and fostering specialized expertise.Early engagement with carbon crediting and markets by and large will be key for the region to position itself favourably in the Paris Agreement era market landscape. The necessary next steps include setting up regulatory systems and market frameworks, building capacity, developing market ecosystems, and piloting projects.