Rent extraction with a type-by-type scheme: An instrument to incorporate sustainable development into the CDM
Although the CDM is supposed to assist developing countries in achieving sustainable development, sustainable development is not incorporated into the market aspect of the CDM. By participating in the CDM, developing countries may end up losing all cheap emissions reduction possibilities, while obtaining little sustainability benefits. This paper proposes rent extraction with a type-by-type scheme as an instrument to incorporate sustainable development into the CDM. The rent extraction with a type-by-type scheme makes it possible for the CDM host country government to discourage the low-cost projects that have little sustainability benefits, and to extract more rent from the projects that are developed. The main challenge of implementing this instrument is the uncertainty of the opportunity cost, but the host country government can adjust the scheme for the uncertainty to achieve its goal. Therefore, the type-by-type scheme will better assist the host country in achieving sustainable development than a single-rate scheme.
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.:
- Adam Rose & Erwin Bulte & Henk Folmer, 1999. "Long-Run Implications for Developing Countries of Joint Implementation of Greenhouse Gas Mitigation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 14(1), pages 19-31, July.
- Muller, Adrian, 2007.
"How to make the clean development mechanism sustainable--The potential of rent extraction,"
Elsevier, vol. 35(6), pages 3203-3212, June.
- Muller, Adrian, 2006. "How to Make the Clean Development Mechanism Sustainable - The Potential of Rent Extraction," Working Papers in Economics 214, University of Gothenburg, Department of Economics.
- Frank Jotzo & Axel Michaelowa, 2002. "Estimating the CDM market under the Marrakech Accords," Climate Policy, Taylor & Francis Journals, vol. 2(2-3), pages 179-196, September.
- Banfi, Silvia & Filippini, Massimo & Mueller, Adrian, 2005. "An estimation of the Swiss hydropower rent," Energy Policy, Elsevier, vol. 33(7), pages 927-937, May.
- Michaelowa, Axel & Jotzo, Frank, 2005. "Transaction costs, institutional rigidities and the size of the clean development mechanism," Energy Policy, Elsevier, vol. 33(4), pages 511-523, March.
- Ellis, Jane & Winkler, Harald & Corfee-Morlot, Jan & Gagnon-Lebrun, Frederic, 2007. "CDM: Taking stock and looking forward," Energy Policy, Elsevier, vol. 35(1), pages 15-28, January. Full references (including those not matched with items on IDEAS)