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Do bilateral commercial relationships influence the distribution of CDM projects?

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  • Valeria Costantini
  • Giorgia Sforna

Abstract

This paper contributes to the issue of the uneven distribution of Clean Development Mechanism (CDM) projects among developing countries. By applying a gravity model to a panel dataset at bilateral country level, we find that well-established export flows from developed economies towards developing countries explain a large portion of the geographical distribution of CDM projects. The policy implication we derive is that a sort of lock-in effect in the CDM relationship should be avoided by enhancing the institutional framework in developing countries hosting CDMs as well as by reinforcing compulsory rules for CDM destination toward the least developed economies. On the contrary, if market forces are left free to influence CDM destination, cost effectiveness in abatement efforts is not the driving force influencing the decision on destination market, but other criteria based on private benefits seem to prevail.

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File URL: http://dipeco.uniroma3.it/public/wp%20176.pdf
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Bibliographic Info

Paper provided by Department of Economics - University Roma Tre in its series Departmental Working Papers of Economics - University 'Roma Tre' with number 0176.

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Length: 36
Date of creation: Jun 2013
Date of revision:
Handle: RePEc:rtr:wpaper:0176

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Related research

Keywords: Kyoto Protocol; Clean Development Mechanism; Export Flows; Gravity Model; Institutional Quality;

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