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How can LDCs benefit from the CDM?: A panel data analysis of determinants of CDM project hosting

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  • Kasai, Katsuya

Abstract

The CDM plays an important role in the international GHG reduction activities. However, the distribution of CDM projects has been quite biased. Hence, considering the current distributional imbalance, this study was conducted aiming to identify the determinants of CDM project hosting in order to suggest potential measures for LDCs based on empirical evidence. By running random effects panel Tobit models, this paper sheds light on the fact that the four significant factors, GHG reduction potentials, governance levels, science and technology levels, and economic ties between host and Annex I countries in the private sector, have positive impacts on hosting CDM projects. This paper, therefore, denotes that the effective way to promote CDM activities in LDCs is to approach both sides: one is that LDCs accomplish the improvement of the significant factors by themselves; and the other is to facilitate the programmatic CDM activities by enlisting cooperation from international organisations or firms capable of investing in CDM activities in LDCs and/or providing capacity building programs. It is hoped that both Annex I and Non-Annex I countries tackle the climate change issue with stimulating the effective use of this innovative mechanism, CDM, not only in advanced developing countries but also in LDCs.

Suggested Citation

  • Kasai, Katsuya, 2012. "How can LDCs benefit from the CDM?: A panel data analysis of determinants of CDM project hosting," MPRA Paper 52137, University Library of Munich, Germany, revised Dec 2012.
  • Handle: RePEc:pra:mprapa:52137
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    File URL: https://mpra.ub.uni-muenchen.de/52137/1/MPRA_paper_52137.pdf
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    References listed on IDEAS

    as
    1. Raubenheimer, Stefan & Michaelowa, Axel & Jahn, Michael & Liptow, Holger, 2004. "Measuring the Potential of Unilateral CDM : A Pilot Study," HWWA Discussion Papers 263, Hamburg Institute of International Economics (HWWA).
    2. Axel Michaelowa, 2007. "Unilateral CDM—can developing countries finance generation of greenhouse gas emission credits on their own?," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 7(1), pages 17-34, March.
    3. Dinar, Ariel & Mahfuzur Rahman, Shaikh & Larson, Donald & Ambrosi, Philippe, 2008. "Factors Affecting Levels Of International Cooperation In Carbon Abatement Projects," Policy Research Working Paper Series 4786, The World Bank.
    4. Kasai, Katsuya, 2011. "A Cross-Country Empirical Analysis of Determinants of Clean Development Mechanism (CDM) Projects," MPRA Paper 52160, University Library of Munich, Germany, revised Jan 2012.
    5. Amemiya, Takeshi, 1984. "Tobit models: A survey," Journal of Econometrics, Elsevier, vol. 24(1-2), pages 3-61.
    6. Muller, Adrian, 2007. "How to make the clean development mechanism sustainable--The potential of rent extraction," Energy Policy, Elsevier, vol. 35(6), pages 3203-3212, June.
    7. Yongfu Huang & Terry Barker, 2008. "The Clean Development Mechanism and Sustainable Development: A Panel Data Analysis," Environmental Economy and Policy Research Working Papers 39.2008, University of Cambridge, Department of Land Economics, revised 2008.
    8. Sanjeev Gupta & Hamid Davoodi & Rosa Alonso-Terme, 2002. "Does corruption affect income inequality and poverty?," Economics of Governance, Springer, vol. 3(1), pages 23-45, March.
    9. Michaelowa, Axel & Michaelowa, Katharina, 2005. "Climate or development: Is ODA diverted from its original purpose?," HWWI Research Papers 4-2, Hamburg Institute of International Economics (HWWI).
    10. Emma Paulsson, 2009. "A review of the CDM literature: from fine-tuning to critical scrutiny?," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 9(1), pages 63-80, February.
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    More about this item

    Keywords

    CDM; Kyoto Protocol; LDCs; ODA; Tobit model;

    JEL classification:

    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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