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Net climate change mitigation of the Clean Development Mechanism


  • Erickson, Peter
  • Lazarus, Michael
  • Spalding-Fecher, Randall


The Clean Development Mechanism (CDM) has allowed industrialized countries to buy credits from developing countries for the purpose of meeting targets under the Kyoto Protocol. In principle, the CDM simply shifts the location of emission reductions, with no net mitigation impact. Departing from this zero-sum calculus, the Cancun Agreements reached at the sixteenth session of the Conference of the Parties (COP) in 2010 called for “one or more market-based mechanisms” capable of “ensuring a net decrease and/or avoidance of global greenhouse gas emissions”, an intention reiterated at COP 17 and COP 18. This article explores the extent to which the CDM may or may not already lead to such a “net decrease.” It finds that the CDM׳s net mitigation impact likely hinges on the additionality of large-scale power projects, which are expected to generate the majority of CDM credits going forward. If these projects are truly additional and continue to operate well beyond the credit issuance period, they will decrease global greenhouse gas emissions. However, if they are mostly non-additional, as research suggests, they could increase global greenhouse gas emissions. The article closes with a discussion of possible means to increase mitigation benefit.

Suggested Citation

  • Erickson, Peter & Lazarus, Michael & Spalding-Fecher, Randall, 2014. "Net climate change mitigation of the Clean Development Mechanism," Energy Policy, Elsevier, vol. 72(C), pages 146-154.
  • Handle: RePEc:eee:enepol:v:72:y:2014:i:c:p:146-154
    DOI: 10.1016/j.enpol.2014.04.038

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    References listed on IDEAS

    1. Lambert Richard Schneider, 2011. "Perverse incentives under the CDM: an evaluation of HFC-23 destruction projects," Climate Policy, Taylor & Francis Journals, vol. 11(2), pages 851-864, March.
    2. Lambert Schneider, 2009. "Assessing the additionality of CDM projects: practical experiences and lessons learned," Climate Policy, Taylor & Francis Journals, vol. 9(3), pages 242-254, May.
    3. Randall Spalding-Fecher & Axel Michaelowa, 2013. "Should the use of standardized baselines in the CDM be mandatory?," Climate Policy, Taylor & Francis Journals, vol. 13(1), pages 80-88, January.
    4. Lambert Schneider, 2009. "A Clean Development Mechanism with global atmospheric benefits for a post-2012 climate regime," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 9(2), pages 95-111, May.
    5. Wang, Bo, 2010. "Can CDM bring technology transfer to China?--An empirical study of technology transfer in China's CDM projects," Energy Policy, Elsevier, vol. 38(5), pages 2572-2585, May.
    6. Greiner, Sandra & Michaelowa, Axel, 2003. "Defining Investment Additionality for CDM projects--practical approaches," Energy Policy, Elsevier, vol. 31(10), pages 1007-1015, August.
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    2. Jaraitė, Jūratė & Kurtyka, Oliwia & Ollivier, Hélène, 2022. "Take a ride on the (not so) green side: How do CDM projects affect Indian manufacturing firms’ environmental performance?," Journal of Environmental Economics and Management, Elsevier, vol. 114(C).
    3. Kim, Jeayoon & Park, Kwangwoo, 2018. "Effect of the Clean Development Mechanism on the deployment of renewable energy: Less developed vs. well-developed financial markets," Energy Economics, Elsevier, vol. 75(C), pages 1-13.
    4. Katherine Calvin & Steven Rose & Marshall Wise & Haewon McJeon & Leon Clarke & Jae Edmonds, 2015. "Global climate, energy, and economic implications of international energy offsets programs," Climatic Change, Springer, vol. 133(4), pages 583-596, December.
    5. Lambert Schneider & Michael Lazarus & Carrie Lee & Harro van Asselt, 2017. "Restricted linking of emissions trading systems: options, benefits, and challenges," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 17(6), pages 883-898, December.
    6. Zhang, Yue-Jun & Sun, Ya-Fang & Huang, Junling, 2018. "Energy efficiency, carbon emission performance, and technology gaps: Evidence from CDM project investment," Energy Policy, Elsevier, vol. 115(C), pages 119-130.
    7. Huiying Ye & Qi Zhang & Xunzhang Pan & Arash Farnoosh, 2020. "Market-induced carbon leakage in China’s certified emission reduction projects," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 25(6), pages 987-1012, August.
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    9. Nieto, Jaime & Carpintero, Óscar & Miguel, Luis J., 2018. "Less than 2°C? An Economic-Environmental Evaluation of the Paris Agreement," Ecological Economics, Elsevier, vol. 146(C), pages 69-84.
    10. Dorman,Peter, 2022. "Alligators in the Arctic and How to Avoid Them," Cambridge Books, Cambridge University Press, number 9781316516270, November.

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