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Risk Management in the Clean Development Mechanism (CDM) – The Potential of Sustainability Labels

Listed author(s):
  • Muller, Adrian


    (Department of Economics, School of Business, Economics and Law, Göteborg University)

There is a danger that the CDM will fail to live up to its goals, namely reduction of greenhouse gas emissions and enhanced sustainable development. Sustainability labeling is a promising strategy to hedge against such failures. Labels could also serve as a business risk-hedging tool. The existing labels for the CDM are not comprehensive enough, however. A two-tiered stakeholder participatory approach with national flexibility under an international umbrella could be a promising option. Due to the necessary bureaucracy this might not be feasible. Labels in the spirit of the existing approaches – addressing only restricted aspects of sustainability or not applicable to all sectors may be a second best option. Other instruments for the further regulation of the CDM, such as a profit tax, should therefore be discussed as well.

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Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 228.

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Length: 16 pages
Date of creation: 20 Sep 2006
Publication status: Forthcoming in Climate change, Sustainable Development and Risk - an Economic and Business View, Antes, R., Hansjürgens, B., Zabel, H.-U. (eds.), 2007, Springer.
Handle: RePEc:hhs:gunwpe:0228
Contact details of provider: Postal:
Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden

Phone: 031-773 10 00
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