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Towards an effective implementation of clean development mechanism projects in China

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Author Info
Zhang, ZhongXiang

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Abstract

With the already huge and growing amount of greenhouse gas emissions and a great deal of low-cost abatement options available, China is widely expected as the world’s number one host country of clean development mechanism (CDM) projects. But, making this potential a reality represents a significant challenge for China, because there has been a general lack of awareness by both the Chinese government and business communities, clear institutional structure, and implementation strategy. This has raised great concern about China’s ability to compete internationally for CDM projects and exploit fully its CDM potential. This paper aims to address how CDM projects will be effectively implemented in China by examining the major CDM capacity building projects in China with bilateral and multilateral donors, the treatment of low-cost, non-priority CDM projects, and how a system for application, approval and implementation of CDM projects is set up in China and what roles the main institutional actors are going to play in the system. We conclude that these capacity building assistances, the establishment of streamlined and transparent CDM procedures and sound governance, and the lessons learned and experience gained from the implementation of the CDM project in Inner Mongolia and the two Prototype Carbon Fund (PCF)’ projects will help China to take advantage of CDM opportunities. Moreover, in order to further capitalize on its CDM potential, there is a pressing need for the Chinese government to amend its current interim CDM regulations, in particular those controversial provisions on the eligibility to participate in CDM projects in China and the distribution of the revenues derived from CDM project between the project developer and the Chinese government. We believe that taking these capacity building projects and the recommended actions to clearly define the sustainable development objective of the CDM and disseminate CDM knowledge to local authorities and project developers as sectorally and geographically wide as possible, addressing those controversial CDM provisions with clearer guidance, and gaining experience from real practice will reduce the perceived project risks and lower the barriers to CDM project development in China. This is, in turn, likely to lead a much greater percentage of carbon credits to come from CDM projects in China over the next several years.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 13147.

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Date of creation: May 2004
Date of revision: Jul 2005
Handle: RePEc:pra:mprapa:13147

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Related research
Keywords: Clean development mechanism; Capacity building; Charge/tax scheme; China; Price of CERs; Sustainable development;

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Find related papers by JEL classification:
Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Costs; Distributional Effects; Employment Effects
Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Zhang, ZhongXiang, 2004. "Meeting the Kyoto targets: the importance of developing country participation," Journal of Policy Modeling, Elsevier, vol. 26(1), pages 3-19, January. [Downloadable!] (restricted)
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  2. ZhongXiang Zhang, 2000. "Estimating the size of the potential market for the Kyoto flexibility mechanisms," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 136(3), pages 491-521, 09. [Downloadable!] (restricted)
    Other versions:
  3. Zhang, ZhongXiang, 1999. "Estimating the size of the potential market for all three flexibility mechanisms under the Kyoto Protocol," MPRA Paper 13088, University Library of Munich, Germany. [Downloadable!]
  4. Zhang, ZhongXiang, 2001. "An assessment of the EU proposal for ceilings on the use of Kyoto flexibility mechanisms," Ecological Economics, Elsevier, vol. 37(1), pages 53-69, April. [Downloadable!] (restricted)
    Other versions:
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Zhang, ZhongXiang, 2008. "Asian Energy and Environmental Policy: Promoting Growth While Preserving the Environment," MPRA Paper 12224, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  2. Zhang, ZhongXiang, 2008. "Is it fair to treat China as a Christmas tree to hang everybody’s complaints? Putting its own energy saving into perspective," MPRA Paper 12276, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  3. Emma Paulsson, 2009. "A review of the CDM literature: from fine-tuning to critical scrutiny?," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 9(1), pages 63-80, February. [Downloadable!] (restricted)
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