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Cities and Carbon Market Finance: Taking Stock of Cities' Experience With Clean Development Mechanism (CDM) and Joint Implementation (JI)


  • Christa Clapp


  • Alexia Leseur

    (CDC Climat Research)

  • Oliver Sartor

    (CDC Climat Research)

  • Gregory Briner


  • Jan Corfee-Morlot



The importance of cities in climate policy stems from the simple reality that they house the majority of the world’s population, two-thirds of world energy use and over 70% of global energy use emissions. At the international level, global carbon markets have become an important new source of financing for mitigation projects and programmes. Yet to date, the participation of urban authorities and of urban mitigation projects in the global carbon market remains extremely limited. The under-representation of urban carbon projects can be linked both to the difficulties to implement urban mitigation projects and to the difficulties for cities to access the carbon market. This paper reviews 10 in–depth case studies of urban projects proposed and operating within the realm of Joint Implementation (JI) and the Clean Development Mechanism (CDM) of the Kyoto Protocol. It explores the drivers of success for projects, examining in particular: types of projects that have been successful and their profitability; leadership and other roles of various actors in project initiation development and operation (i.e. local, regional and national governments as well as international, private sector or other non-governmental organisations); the role of local cobenefits; and project financial structure and risk management approaches. This paper also considers how these lessons learned may inform decisions in the future about how to best tap the potential for carbon markets to offer increased levels of financial support for urban mitigation projects or programmes. La place accordée aux villes dans la politique climatique découle d’un constat simple : elles abritent la majorité de la population mondiale, consomment les deux tiers de l’énergie mondiale et produisent plus de 70 % des émissions mondiales liées à cette consommation. Au niveau international, les marchés mondiaux du carbone sont devenus une nouvelle source importante de financement pour les projets et les programmes d’atténuation. Pourtant, à ce jour, la participation des autorités urbaines et des projets urbains d’atténuation au marché mondial du carbone reste encore extrêmement limitée. La sous-représentation des projets urbains dans le domaine du carbone est à mettre en rapport avec les difficultés inhérentes à la mise en oeuvre de projets urbains d’atténuation et avec les obstacles rencontrés par les villes pour accéder au marché du carbone. Ce rapport examine dix études de cas approfondies portant sur des projets urbains, envisagés ou existants, dans le domaine de la mise en oeuvre conjointe (MOC) ou du mécanisme pour un développement propre (MDP) du Protocole de Kyoto. Il explore les facteurs de succès des projets, en examinant plus particulièrement les types de projets qui ont réussi et leur rentabilité ; le rôle moteur des autorités et celui des différents acteurs dans le lancement des projets, leur développement et leur fonctionnement (autorités locales, régionales et nationales, et organisations internationales, non gouvernementales et du secteur privé) ; les avantages connexes locaux ; et les approches en matière de structure financière des projets et de gestion des risques. Cette étude envisage aussi comment les enseignements tirés de ces expériences pourront à l’avenir éclairer les décisions futures sur les moyens de mobiliser au mieux le potentiel des marchés du carbone au service de l’accroissement du soutien financier aux projets ou programmes urbains d’atténuation.

Suggested Citation

  • Christa Clapp & Alexia Leseur & Oliver Sartor & Gregory Briner & Jan Corfee-Morlot, 2010. "Cities and Carbon Market Finance: Taking Stock of Cities' Experience With Clean Development Mechanism (CDM) and Joint Implementation (JI)," OECD Environment Working Papers 29, OECD Publishing.
  • Handle: RePEc:oec:envaaa:29-en

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    References listed on IDEAS

    1. Francesco Bosello, 2010. "Adaptation, Mitigation and “Green” R&D to Combat Global Climate Change. Insights From an Empirical Integrated Assessment Exercise," Working Papers 2010.22, Fondazione Eni Enrico Mattei.
    2. de Bruin, Kelly Chloe, 2011. "Distinguishing Between Proactive (Stock) and Reactive (Flow) Adaptation," CERE Working Papers 2011:8, CERE - the Center for Environmental and Resource Economics.
    3. Enrica De Cian & Elisa Lanzi & Roberto Roson, 2007. "The Impact of Temperature Change on Energy Demand: A Dynamic Panel Analysis," Working Papers 2007.46, Fondazione Eni Enrico Mattei.
    4. Andrea Bigano & Francesco Bosello & Giuseppe Marano, 2006. "Energy Demand and Temperature: A Dynamic Panel Analysis," Working Papers 2006.112, Fondazione Eni Enrico Mattei.
    5. Enrica De Cian & Valentina Bosetti & Alessandra Sgobbi & Massimo Tavoni, 2009. "The 2008 WITCH Model: New Model Features and Baseline," Working Papers 2009.85, Fondazione Eni Enrico Mattei.
    6. William R. Cline, 1992. "Economics of Global Warming, The," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 39.
    7. Valentina Bosetti & Emanuele Massetti & Massimo Tavoni, 2007. "The WITCH Model. Structure, Baseline, Solutions," Working Papers 2007.10, Fondazione Eni Enrico Mattei.
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    Cited by:

    1. Park, Taeil & Kim, Changyoon & Kim, Hyoungkwan, 2014. "A real option-based model to valuate CDM projects under uncertain energy policies for emission trading," Applied Energy, Elsevier, vol. 131(C), pages 288-296.

    More about this item


    atténuation des émissions de gaz à effet de serre; carbon finance; changement climatique; cities; climate change; finance carbone; greenhouse gas mitigation; Kyoto protocol; Protocole de Kyoto; villes;

    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods

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