Wine, fruit and emission reductions: CDM as development strategy in Chile

The Clean Development Mechanism (CDM) is expected to lower the costs for developed countries to meet their emission reduction targets, and to contribute to sustainable development in developing countries. As host countries set their own sustainable development requirements, fears have been raised about a ‘race to the bottom’ as countries use less demanding criteria to attract investors. Our research on Chile confirms this hypothesis, but suggests that the ‘race’ is not simply a structural feature of the CDM, but a deliberate strategy. Chile has chosen to use CDM as a tool to attract foreign investments, a choice reflecting the emphasis on economic development in Chile’s development strategy.