Carbon markets have been in crisis this year, with the price of carbon offsets issued under the CDM reaching all-time lows.

CDM has also received bad press over the last year, primarily because the mechanism has funded large industrial gas projects in India and China with questionable emissions, reductions and limited benefits for sustainable development. As a consequence, the CDM executive board appointed a high level panel to investigate the impact of the CDM, and make recommendations about its future. The panel is chaired by Valli Moosa, South Africa's former environment minister, who has roped me in to provide technical support to the work of the panel.

Our work has been informed by stakeholder consultations which have taken place in every region of the world. Stakeholder views have been quite polarised, with some NGOs seeing market mechanisms as inherently flawed.

Others have pointed to the success of CDM in spreading low carbon technologies in developing countries and building their capacity to make emission reductions of their own in the future.

For Africa, the crisis in carbon markets is particularly disappointing. It has taken a long time to build capacity in African countries to design and implement CDM projects, which means that, to date, Africa has only cornered 2% of the market. But this has been changing rapidly, and Africa is using more programmatic approaches to emission reductions, such as solar cookers or rural PV systems.

The recent Africa Carbon Forum held in Addis Ababa had an unprecedented level of interest.

But, with carbon prices at an all- time low, this mobilisation seems to be in vain. The lack of political ambition in the seemingly never- ending climate change negotiations is the main reason the price is so low. And this sends the wrong signal to the global economy. Effective mitigation of emissions depends on the price of carbon being properly factored in to investment decisions. With low carbon offset prices this is not happening.

The panel will focus on how to improve CDM and position it for the future. The current collapse in the market gives some breathing space to make necessary reforms for a market that in the long term will undoubtedly be buoyant.

The panel is making its recommendations in September, and they will be debated at the upcoming COP 18 in Qatar.