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Inequality, unemployment, and poverty impacts of mitigation investment: evidence from the CDM in Brazil and implications for a post-2020 mechanism

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  • David Grover

    (EESC-GEM Grenoble Ecole de Management)

  • Swaroop Rao

    (EESC-GEM Grenoble Ecole de Management, IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc)

Abstract

Article 6 of the Paris Agreement provides for the creation of a successor to the Clean Development Mechanism (CDM), the parameters of which are currently being operationalised. This paper uses the broad literature on the relationship between general foreign direct investment (FDI) and inequality in FDI host countries to develop expectations about the likely impact of past and future international mitigation investment on inequality, unemployment and poverty outcomes. Using 2000 and 2010 census data for small geographic areas in Brazil, we compare the change in those outcomes in areas that experienced CDM project activity to the same in areas that did not, using a difference-indifference approach. We find that areas with CDM project activity experienced improvements in those outcomes, which appear to be driven by project types that are associated with 'primary' sector activity. Including measurement and reporting procedures for these broader sustainable development outcomes in the rulebook of a post-2020 agreement could be favourable to the interests of both developed and developing countries.

Suggested Citation

  • 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," Post-Print hal-03404189, HAL.
    • Handle: RePEc:hal:journl:hal-03404189
    DOI: 10.1080/14693062.2020.1760773
    Note: View the original document on HAL open archive server: https://hal.science/hal-03404189
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