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Explaining the differential distribution of Clean Development Mechanism projects across host countries

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  • Winkelman, Andrew G.
  • Moore, Michael R.
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    Abstract

    The Clean Development Mechanism (CDM) of the Kyoto Protocol represents an opportunity to involve all developing countries in the effort to reduce greenhouse gas emissions while also promoting sustainable development. To date, however, the majority of CDM projects have gone to emerging markets such as China, India, Brazil, and Mexico, while very few least developed countries have hosted projects. This paper investigates the differential distribution of CDM activities across countries. We develop a conceptual model for project profitability, which helps to identify potential country-level determinants of CDM activity. These potential determinants are employed as explanatory variables in regression analysis to explain the actual distribution of projects. Human capital and greenhouse gas emission levels influenced which countries have hosted projects and the amount of certified emission reductions (CER) created. Countries that offered growing markets for CDM co-products, such as electricity, were more likely to be CDM hosts, while economies with higher carbon intensity levels had greater CER production. These findings work against the least developed countries and help to explain their lack of CDM activity.

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    Bibliographic Info

    Article provided by Elsevier in its journal Energy Policy.

    Volume (Year): 39 (2011)
    Issue (Month): 3 (March)
    Pages: 1132-1143

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    Handle: RePEc:eee:enepol:v:39:y:2011:i:3:p:1132-1143

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    Keywords: Developing countries Greenhouse gas emissions Kyoto Protocol;

    References

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    1. Zhang, ZhongXiang, 2004. "Towards an effective implementation of clean development mechanism projects in China," MPRA Paper 13147, University Library of Munich, Germany, revised Jul 2005.
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    7. Noorbakhsh, Farhad & Paloni, Alberto & Youssef, Ali, 2001. "Human Capital and FDI Inflows to Developing Countries: New Empirical Evidence," World Development, Elsevier, vol. 29(9), pages 1593-1610, September.
    8. Samuel Fankhauser & Lucia Lavric, 2003. "The investment climate for climate investment: Joint Implementation in transition countries," Working Papers 77, European Bank for Reconstruction and Development, Office of the Chief Economist.
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    10. Asiedu, Elizabeth, 2002. "On the Determinants of Foreign Direct Investment to Developing Countries: Is Africa Different?," World Development, Elsevier, vol. 30(1), pages 107-119, January.
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    Cited by:
    1. Sawhney, Aparna & Rahul, M., 2014. "Examining the regional pattern of renewable energy CDM power projects in India," Energy Economics, Elsevier, vol. 42(C), pages 240-247.
    2. Xie, Huiming & Shen, Manhong & Wang, Rui, 2014. "Determinants of clean development mechanism activity: Evidence from China," Energy Policy, Elsevier, vol. 67(C), pages 797-806.
    3. Pauline Lacour & Jean-Christophe Simon, 2012. "Quelle intégration des pays en développement dans le régime climatique ? Le Mécanisme pour un Développement Propre en Asie," Post-Print halshs-00763231, HAL.

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