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Africa and the Clean Development Mechanism: What Determines Project Investments?

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  • Röttgers, Dirk
  • Grote, Ulrike

Abstract

African countries have hardly used the opportunity to implement CDM projects and thereby turn environmental problems into business and development opportunities. This paper finds out why by identifying factors of CDM partnerships. Our gravity model analyzes flows of Certified Emission Reductions (CERs) between host and financier countries. Findings show that foreign direct investments, official development assistance, and trade have a positive influence on project attraction. A distinction between project initiation and CER flow size shows that the specific shortcomings of African countries lie with the initial attraction of investors. This points to an inadequacy in the initial process of project generation.

Suggested Citation

  • Röttgers, Dirk & Grote, Ulrike, 2014. "Africa and the Clean Development Mechanism: What Determines Project Investments?," World Development, Elsevier, vol. 62(C), pages 201-212.
  • Handle: RePEc:eee:wdevel:v:62:y:2014:i:c:p:201-212
    DOI: 10.1016/j.worlddev.2014.05.009
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    2. Belachew Gizachew & Rasmus Astrup & Pål Vedeld & Eliakimu M. Zahabu & Lalisa A. Duguma, 2017. "REDD+ in Africa: contexts and challenges," Natural Resources Forum, Blackwell Publishing, vol. 41(2), pages 92-104, May.
    3. Le Thanh Tung, 2018. "The Impact Of Remittances On Domestic Investment In Developing Countries: Fresh Evidence From The Asia-Pacific Region," Organizations and Markets in Emerging Economies, Faculty of Economics, Vilnius University, vol. 9(2).
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    5. Purdon, Mark, 2015. "Opening the Black Box of Carbon Finance “Additionality”: The Political Economy of Carbon Finance Effectiveness across Tanzania, Uganda, and Moldova," World Development, Elsevier, vol. 74(C), pages 462-478.

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