The Ethical Challenges of the UN’s Clean Development Mechanism

Candace Martinez () and J. Bowen ()

Journal of Business Ethics, 2013, vol. 117, issue 4, 807-821

Abstract: This paper examines the ethical implications of the Clean Development Mechanism (CDM), the United Nation’s climate change initiative that provides incentives to countries and firms in developed countries to motivate investments in greenhouse gas reduction projects in developing countries. Using the tenets of agency theory, we present a solid waste management project in El Salvador as an illustrative example of how the CDM can produce a disproportionately high social cost for the most marginalized populations in the developing world. We suggest that the UN needs to reformulate the CDM so that it more effectively aligns the divergent goals of multiple actors and upholds the UN’s principles for sustainable development, including ethical firm-level behavior. By providing incentives for environmental, economic, and social value creation, the CDM would not only promote ethical norms for profit-seeking firms that participate in the program but also reinforce the UN’s twin pro-poor and environmental objectives. Copyright Springer Science+Business Media Dordrecht 2013

Keywords: Ethics; United Nations; Clean Development Mechanism; Agency theory; Solid waste management; El Salvador (search for similar items in EconPapers)
Date: 2013
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DOI: 10.1007/s10551-013-1720-4

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