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The design flaw of the displacement principle of clean development mechanism: the neglect of electricity shortage

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  • Jinshan Zhu
  • Yingkai Tang

Abstract

This study addresses a methodology flaw of Kyoto Protocol’s Clean Development Mechanism (CDM) that neglects the wide-spread electricity shortage in the developing countries. The impact of this neglect is huge: about half of the annual carbon credits from the projects registered by 2010 are from the on-grid electricity displacement projects, and the majority of them had concentrated in several countries where electricity shortage remains severe and lasting. In the context of widespread energy shortage, the extra electricity produced by the CDM projects is more likely to be used to provide extra electricity supply rather than substitute the Business-as-usual (BAU) electricity supply. Hence, the neglect of the wide-spread energy shortage in the CDM methods puts the integrity of a critical amount of the CDM carbon credit in question. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Jinshan Zhu & Yingkai Tang, 2015. "The design flaw of the displacement principle of clean development mechanism: the neglect of electricity shortage," European Journal of Law and Economics, Springer, vol. 40(2), pages 367-391, October.
    • Handle: RePEc:kap:ejlwec:v:40:y:2015:i:2:p:367-391
    DOI: 10.1007/s10657-012-9374-8
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    References listed on IDEAS

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    1. Zhu, Jinshan, 2012. "The Correlated Factors of the Uneven Performances of the CDM Countries," IEL Working Papers 11, Institute of Public Policy and Public Choice - POLIS.
    2. Jeff Tollefson, 2008. "Carbon-trading market has uncertain future," Nature, Nature, vol. 452(7187), pages 508-509, April.
    3. Hermann E. Ott & Wolfgang Sterk & Rie Watanabe, 2008. "The Bali roadmap: new horizons for global climate policy," Climate Policy, Taylor & Francis Journals, vol. 8(1), pages 91-95, January.
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    Cited by:

    1. Jinshan Zhu, 2017. "Assessing China’s price review policy on Clean Development Mechanism projects," European Journal of Law and Economics, Springer, vol. 43(2), pages 285-316, April.

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    More about this item

    Keywords

    Carbon credits; Carbon emissions trading; Clean development mechanism (CDM); Q54; K32; K33;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law

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