The financialization of rivers: Clean Development Mechanism (CDM) subsidized hydropower in the Mekong Region’s basins at risk

• The CDM funded hundreds of large hydropower dams in rivers at risk for conflict. • The Mekong Region received an inordinate amount of CDM funded dams. • This water blind climate change policy is increasing hydropolitical tensions. The Kyoto Protocol’s Clean Development Mechanism (CDM) is a key carbon offset scheme that underpins the global carbon market. This mechanism leaves out many other non-carbon considerations, including the impacts of the CDM on water governance. The CDM produces credits primarily through energy projects and CDM funded hydropower is one of the most significant outcomes of nearly two decades of carbon financing with funding subsidizing over 1,000 large-scale dams. This research maps these rapidly built infrastructure projects in transboundary river systems, which has shown to have direct links to increasing hydropolitical tensions. The Mekong Region’s Irrawaddy, Bei Jiang/Hsi, Red, and Salween rivers are all considered to be amongst the world’s river basins considered ‘very high risk’ for conflict. Our research shows that these ‘very high risk’ rivers were the top four river basins to receive CDM funded large-scale hydropower. These four basins at ‘very high risk’ along with the Mekong River were the top five recipient rivers of 274 CDM subsidized large-scale dams. These dams were rapidly financed and constructed in the upstream catchments in the name of carbon reduction claims in China and Europe. This response to climate change enhances power imbalances and raises the risk of hydropolitical tensions as Mekong communities shoulder the costs of increasing insecurities in the name of distant carbon reduction claims in Europe and Beijing.