This paper analyses potential criteria to allocate international funding for adaptation to climate change, as a response to one of the main governance challenges of international adaptation funding - the prioritization of project proposals given scarce funding.

The Clean Development Mechanism (CDM) aims at a cost-effective reduction of GHG emissions and technology and capital transfer from industrialised to developing countries. The CDM has seen a true gold rush period, with thousands of projects being developed in a few years. More and more governments and companies bet on the CDM to fill their compliance gaps. This report contains the main results and conclusions of the project Empirical analysis of performance of CDM projects implemented by Climate Strategies.

A sample of 52 Indian CDM projects registered until May, 20, 2006 is analyzed with respect to the testing of additionality. While almost all projects do additionality testing, only half of them identify alternatives. Barrier testing is almost universal but only a third of the projects do an investment analysis. Small scale projects are less likely to look at the impact of CDM

How can CDM resolve the conflict between developed and developing country interests?

Developing nations should get more actively involved with international politics on climate change. They should propose and direct negotiations, rather than just react and respond