IDEAS home Printed from https://ideas.repec.org/a/eee/ecolec/v157y2019icp47-60.html
   My bibliography  Save this article

Do Clean Development Mechanism Projects Generate Local Employment? Testing for Sectoral Effects across Brazilian Municipalities

Author

Listed:
  • Mori-Clement, Yadira
  • Bednar-Friedl, Birgit

Abstract

Clean Development Mechanism (CDM) projects have a two-fold objective: reducing greenhouse gas emissions and contributing to sustainable development. But while the contribution to mitigation has been analyzed extensively in the literature, the impact on development has seldomly been quantified empirically. This paper addresses this gap by investigating the impacts of CDM projects on local employment. We use a dynamic panel regression model across Brazilian municipalities for the period 2004–2014 to estimate cross-sectoral employment effects of two project types: hydro projects and methane avoidance projects. We find that CDM projects have mixed effects on sectoral employment. Municipalities with hydro projects show a positive impact on commerce and a negative on agricultural employment. In a similar way, these effects have also been identified in municipalities with methane avoidance projects, as well as positive effects in the service and the construction sector. Regardless of project type, the sectoral employment effects are found to be small and transitory, i.e. these took place immediately or within the first, second or third year after the registration of the project, corresponding to the construction phase and early years of operation. Revenues from Certified Emission Reductions (CER) seem to have no or a very small positive impact on sectoral employment, and no significant impact is found for the CER price fall in 2012.

Suggested Citation

  • Mori-Clement, Yadira & Bednar-Friedl, Birgit, 2019. "Do Clean Development Mechanism Projects Generate Local Employment? Testing for Sectoral Effects across Brazilian Municipalities," Ecological Economics, Elsevier, vol. 157(C), pages 47-60.
    • Handle: RePEc:eee:ecolec:v:157:y:2019:i:c:p:47-60
    DOI: 10.1016/j.ecolecon.2018.10.011
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0921800917317858
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ecolecon.2018.10.011?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Stephen Bond & Anke Hoeffler & Jonathan Temple, 2001. "GMM Estimation of Empirical Growth Models," Economics Papers 2001-W21, Economics Group, Nuffield College, University of Oxford.
    2. Aaditya Mattoo & Arvind Subramanian & Dominique van der Mensbrugghe & Jianwu He, 2012. "Can Global De-Carbonization Inhibit Developing Country Industrialization?," The World Bank Economic Review, World Bank Group, vol. 26(2), pages 296-319.
    3. Aldy, Joseph Edgar, 2011. "Promoting Clean Energy in the American Power Sector," Scholarly Articles 4901643, Harvard Kennedy School of Government.
    4. Komor, Paul & Bazilian, Morgan, 2005. "Renewable energy policy goals, programs, and technologies," Energy Policy, Elsevier, vol. 33(14), pages 1873-1881, September.
    5. Stephen R. Bond, 2002. "Dynamic panel data models: a guide to micro data methods and practice," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 1(2), pages 141-162, August.
    6. Nils May & Øivind A. Nilsen, 2019. "The Local Economic Impact of Wind Power Deployment," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 75(1), pages 56-92.
    7. Uddin, Noim & Blommerde, Mascha & Taplin, Ros & Laurence, David, 2015. "Sustainable development outcomes of coal mine methane clean development mechanism Projects in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 45(C), pages 1-9.
    8. Dhakal, Shobhakar & Raut, Anil K., 2010. "Potential and bottlenecks of the carbon market: The case of a developing country, Nepal," Energy Policy, Elsevier, vol. 38(7), pages 3781-3789, July.
    9. Du, Yimeng & Takeuchi, Kenji, 2019. "Can climate mitigation help the poor? Measuring impacts of the CDM in rural China," Journal of Environmental Economics and Management, Elsevier, vol. 95(C), pages 178-197.
    10. United Nations UN, 2015. "Transforming our World: the 2030 Agenda for Sustainable Development," Working Papers id:7559, eSocialSciences.
    11. Ina Meyer & Mark Sommer, 2014. "Employment Effects of Renewable Energy Supply – A Meta Analysis. WWWforEurope Policy Paper No. 12," WIFO Studies, WIFO, number 47225, February.
    12. Martinez, Candace A. & Bowen, J.D., 2012. "The Clean Development Mechanism in the Solid Waste Management Sector: Sustainable for Whom?," Ecological Economics, Elsevier, vol. 82(C), pages 123-125.
    13. Luthra, Sunil & Kumar, Sanjay & Garg, Dixit & Haleem, Abid, 2015. "Barriers to renewable/sustainable energy technologies adoption: Indian perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 41(C), pages 762-776.
    14. Wang, Can & Zhang, Weishi & Cai, Wenjia & Xie, Xi, 2013. "Employment impacts of CDM projects in China's power sector," Energy Policy, Elsevier, vol. 59(C), pages 481-491.
    15. Brown, Jason P. & Pender, John & Wiser, Ryan & Lantz, Eric & Hoen, Ben, 2012. "Ex post analysis of economic impacts from wind power development in U.S. counties," Energy Economics, Elsevier, vol. 34(6), pages 1743-1754.
    16. Stephen Bond & Anke Hoeffler, 2001. "GMM Estimation of Empirical Growth Models," Economics Series Working Papers 2001-W21, University of Oxford, Department of Economics.
    17. Mori-Clement, Yadira, 2019. "Impacts of CDM projects on sustainable development: Improving living standards across Brazilian municipalities?," World Development, Elsevier, vol. 113(C), pages 222-236.
    18. Simas, Moana & Pacca, Sergio, 2014. "Assessing employment in renewable energy technologies: A case study for wind power in Brazil," Renewable and Sustainable Energy Reviews, Elsevier, vol. 31(C), pages 83-90.
    19. Olsen, Karen Holm & Fenhann, Jørgen, 2008. "Sustainable development benefits of clean development mechanism projects: A new methodology for sustainability assessment based on text analysis of the project design documents submitted for validatio," Energy Policy, Elsevier, vol. 36(8), pages 2773-2784, August.
    20. Stephen Bond, 2002. "Dynamic panel data models: a guide to microdata methods and practice," CeMMAP working papers CWP09/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    21. Hillebrand, Bernhard & Buttermann, Hans Georg & Behringer, Jean Marc & Bleuel, Michaela, 2006. "The expansion of renewable energies and employment effects in Germany," Energy Policy, Elsevier, vol. 34(18), pages 3484-3494, December.
    22. Subbarao, Srikanth & Lloyd, Bob, 2011. "Can the Clean Development Mechanism (CDM) deliver?," Energy Policy, Elsevier, vol. 39(3), pages 1600-1611, March.
    23. Reddy, V. Ratna & Uitto, Juha I. & Frans, Dirk R. & Matin, Nilufar, 2006. "Achieving global environmental benefits through local development of clean energy? The case of small hilly hydel in India," Energy Policy, Elsevier, vol. 34(18), pages 4069-4080, December.
    24. Jingjing He & Yongfu Huang & Finn Tarp, 2014. "Has the Clean Development Mechanism assisted sustainable development?," Natural Resources Forum, Blackwell Publishing, vol. 0(4), pages 248-260, November.
    25. Nussbaumer, Patrick, 2009. "On the contribution of labelled Certified Emission Reductions to sustainable development: A multi-criteria evaluation of CDM projects," Energy Policy, Elsevier, vol. 37(1), pages 91-101, January.
    26. Yu, Fei & Grady, Patrick & Knipp, Robert, 2012. "Regulatory Stringency in Issuing Certified Emission Reductions and Price Effects in Secondary Markets," MPRA Paper 50184, University Library of Munich, Germany.
    27. Johannes Alexeew & Linda Bergset & Kristin Meyer & Juliane Petersen & Lambert Schneider & Charlotte Unger, 2010. "An analysis of the relationship between the additionality of CDM projects and their contribution to sustainable development," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 10(3), pages 233-248, September.
    28. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    29. del Río, Pablo & Burguillo, Mercedes, 2008. "Assessing the impact of renewable energy deployment on local sustainability: Towards a theoretical framework," Renewable and Sustainable Energy Reviews, Elsevier, vol. 12(5), pages 1325-1344, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wolfgang Buchholz & Dirk Rübbelke, 2020. "Overstraining International Climate Finance: When Conflicts of Objectives Threaten Its Succes," Working Papers 2020.17, Fondazione Eni Enrico Mattei.
    2. Yang, Mian & Hou, Yaru & Fang, Chao & Duan, Hongbo, 2020. "Constructing energy-consuming right trading system for China's manufacturing industry in 2025," Energy Policy, Elsevier, vol. 144(C).
    3. David Grover & Swaroop Rao, 2020. "Inequality, unemployment, and poverty impacts of mitigation investment: evidence from the CDM in Brazil and implications for a post-2020 mechanism," Climate Policy, Taylor & Francis Journals, vol. 20(5), pages 609-625, May.
    4. Jingbo Cui & Zhenxuan Wang & Haishan Yu, 2022. "Can International Climate Cooperation Induce Knowledge Spillover to Developing Countries? Evidence from CDM," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(4), pages 923-951, August.
    5. Arvanitopoulos, T. & Agnolucci, P., 2020. "The long-term effect of renewable electricity on employment in the United Kingdom," Renewable and Sustainable Energy Reviews, Elsevier, vol. 134(C).
    6. Li, Zhen & Wu, Baijun & Wang, Danyang & Tang, Maogang, 2022. "Government mandatory energy-biased technological progress and enterprises' environmental performance: Evidence from a quasi-natural experiment of cleaner production standards in China," Energy Policy, Elsevier, vol. 162(C).
    7. Miren Gutiérrez & Guillermo Gutiérrez, 2019. "Climate Finance: Perspectives on Climate Finance from the Bottom Up," Development, Palgrave Macmillan;Society for International Deveopment, vol. 62(1), pages 136-146, December.
    8. Ottonelli, Janaina & Lazaro, Lira Luz Benites & Andrade, José Célio Silveira & Abram, Simone, 2023. "Do solar photovoltaic clean development mechanism projects contribute to sustainable development in Latin America? Prospects for the Paris Agreement," Energy Policy, Elsevier, vol. 174(C).
    9. Gonçalves, S. & Rodrigues, T.P. & Chagas, A.L.S., 2020. "The impact of wind power on the Brazilian labor market," Renewable and Sustainable Energy Reviews, Elsevier, vol. 128(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yadira Mori Clement & Birgit Bednar-Friedl, 2017. "Do Clean Development Mechanism projects generate local employment? Testing for sectoral effects across Brazilian municipalities," Graz Economics Papers 2017-05, University of Graz, Department of Economics.
    2. Mori-Clement, Yadira, 2019. "Impacts of CDM projects on sustainable development: Improving living standards across Brazilian municipalities?," World Development, Elsevier, vol. 113(C), pages 222-236.
    3. Topcu, Mert & Tugcu, Can Tansel, 2020. "The impact of renewable energy consumption on income inequality: Evidence from developed countries," Renewable Energy, Elsevier, vol. 151(C), pages 1134-1140.
    4. Eicher, Theo S. & Schreiber, Till, 2010. "Structural policies and growth: Time series evidence from a natural experiment," Journal of Development Economics, Elsevier, vol. 91(1), pages 169-179, January.
    5. Bobba, Matteo & Coviello, Decio, 2007. "Weak instruments and weak identification, in estimating the effects of education, on democracy," Economics Letters, Elsevier, vol. 96(3), pages 301-306, September.
    6. Meschi, Elena & Taymaz, Erol & Vivarelli, Marco, 2011. "Trade, technology and skills: Evidence from Turkish microdata," Labour Economics, Elsevier, vol. 18(S1), pages 60-70.
    7. Abonazel, Mohamed R., 2016. "Bias Correction Methods for Dynamic Panel Data Models with Fixed Effects," MPRA Paper 70628, University Library of Munich, Germany.
    8. Jeffrey Kouton, 2021. "The impact of renewable energy consumption on inclusive growth: panel data analysis in 44 African countries," Economic Change and Restructuring, Springer, vol. 54(1), pages 145-170, February.
    9. Benjamin Jung, 2009. "Adjustment Dynamics of Bilateral Trade Flows: Theory and Evidence," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 145(IV), pages 421-442, December.
    10. Gnangnon, Sèna Kimm, 2023. "Duration of membership in the world trade organization and investment-oriented remittances inflows," The Quarterly Review of Economics and Finance, Elsevier, vol. 88(C), pages 258-277.
    11. Coviello, Decio & Islam, Roumeen, 2006. "Does aid help improve economic institutions ?," Policy Research Working Paper Series 3990, The World Bank.
    12. Gnangnon, Sèna Kimm, 2022. "Duration of WTO Membership and Investment-Oriented Remittances Flows," EconStor Preprints 251274, ZBW - Leibniz Information Centre for Economics.
    13. Gnangnon, Sèna Kimm, 2021. "Effect of the Utilization of Non-Reciprocal Trade Preferences offered by the QUAD on Economic Growth in Beneficiary Countries," EconStor Preprints 242848, ZBW - Leibniz Information Centre for Economics.
    14. Martin Andersson & Hans Lööf, 2011. "Agglomeration and productivity: evidence from firm-level data," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 46(3), pages 601-620, June.
    15. Markus Eberhardt & Francis Teal, 2011. "Econometrics For Grumblers: A New Look At The Literature On Cross‐Country Growth Empirics," Journal of Economic Surveys, Wiley Blackwell, vol. 25(1), pages 109-155, February.
    16. Markus Eberhardt & Francis Teal, 2008. "Modeling Technology and Technological Change in Manufacturing: How do Countries Differ?," CSAE Working Paper Series 2008-12, Centre for the Study of African Economies, University of Oxford.
    17. Blandina Oliveira & Adelino Fortunato, 2006. "Testing Gibrat's Law: Empirical Evidence from a Panel of Portuguese Manufacturing Firms," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 13(1), pages 65-81.
    18. Yilmaz Kiliçaslan & Ünal Töngür, 2017. "Information and Communication Technologies and Employment Generation in Turkish Manufacturing Industry," Working Papers 1120, Economic Research Forum, revised 07 2017.
    19. Singhania, Monica & Saini, Neha, 2021. "Demystifying pollution haven hypothesis: Role of FDI," Journal of Business Research, Elsevier, vol. 123(C), pages 516-528.
    20. Coen Teulings & Thijs van Rens, 2008. "Education, Growth, and Income Inequality," The Review of Economics and Statistics, MIT Press, vol. 90(1), pages 89-104, February.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolec:v:157:y:2019:i:c:p:47-60. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolecon .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.