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Future of the Clean Development Mechanism in Tackling Climate Change

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  • Selvaretnam, Geethanjali
  • Thampanishvong, Kannika

Abstract

Using a theoretical framework, we explain the impact of the Clean Development Mechanism (CDM) on emissions in Annex I and non-Annex I countries. We show that on one hand, emissions in the non-Annex I country decline because of abatement sponsored by the Annex I country under the CDM; on the other hand, emissions may increase because (i) the Annex I country increases emissions in its own country, and (ii) the non-Annex I country crowds out the bene ts from the CDM projects by increasing its domestic emissions. For the CDM to be e¤ective in reducing global emissions, we show that partial Certi ed Emissions Reduction credits should be given to the Annex I country that sponsors CDM projects in the non-Annex I country. We also suggest that the CDM Executive Board should not allow the CDM projects to be hosted by non-Annex I countries that are too conscious about their emission levels.

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File URL: http://repo.sire.ac.uk/handle/10943/166
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Bibliographic Info

Paper provided by Scottish Institute for Research in Economics (SIRE) in its series SIRE Discussion Papers with number 2010-35.

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Date of creation: 2010
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Handle: RePEc:edn:sirdps:166

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Keywords: Clean Development Mechanism (CDM); Kyoto Protocol; emission; abatement;

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  1. Shurojit Chatterji & Sayantan Ghosal, 2009. "Technology, Unilateral Commitments and Cumulative Emissions Reduction," CESifo Economic Studies, CESifo, vol. 55(2), pages 286-305, June.
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