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Future of the Clean Development Mechanism in tackling climate change

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  • Geethanjali Selvaretnam
  • Kannika Thampanishvong

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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Bibliographic Info

Paper provided by Department of Economics, University of St. Andrews in its series Discussion Paper Series, Department of Economics with number 200808.

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Date of creation: 15 Aug 2008
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Handle: RePEc:san:wpecon:0808

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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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