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Regulated (CDM) and voluntary carbon offset schemes as carbon offset markets: competition or complementarity?

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  • Simon Bisore
  • Walter Hecq

Abstract

As one of the offsetting instruments, the Clean Development Mechanism (CDM) allows industrialized countries to meet their compliance objectives by undertaking and financing project activities in developing countries with certified emissions reductions (CERs) in return. Next to Kyoto mechanisms, voluntary offset markets for GHG emissions reductions that are not compliant with the Kyoto Protocol are developing quickly. Emissions offsets in this latter category are verified by official or independent agents but are not certified by regulatory authorities for use as a compliance instrument, and are commonly referred to as verified emissions reductions (VERs) which are not a standardized commodity. This paper compares the two types of projects-based carbon offset markets and analyses the question of complementarity or competition between them in their contribution to the mitigation of global warming as well as to sustainable development in the host countries.

Suggested Citation

  • Simon Bisore & Walter Hecq, 2012. "Regulated (CDM) and voluntary carbon offset schemes as carbon offset markets: competition or complementarity?," Working Papers CEB 12-016, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:sol:wpaper:2013/115381
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    References listed on IDEAS

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    1. Simon Bisore & Walter Hecq, 2011. "Geographical distribution of Clean Development Mechanism (CDM) projects: Barriers analysis and actions to undertake for the African continent," ULB Institutional Repository 2013/136784, ULB -- Universite Libre de Bruxelles.
    2. Butzengeiger, Sonja, 2005. "Voluntary compensation of GHG emissions: Selection criteria and implications for the international climate policy system," HWWI Research Reports 1, Hamburg Institute of International Economics (HWWI).
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    4. Olsen, Karen Holm & Fenhann, Jørgen, 2008. "Sustainable development benefits of clean development mechanism projects: A new methodology for sustainability assessment based on text analysis of the project design documents submitted for validatio," Energy Policy, Elsevier, vol. 36(8), pages 2773-2784, August.
    5. Nicholas Linacre & Alexandre Kossoy & Philippe Ambrosi, "undated". "State and Trends of the Carbon Market 2011," World Bank Publications - Reports 13400, The World Bank Group.
    6. Axel Michaelowa & Marcus Stronzik & Frauke Eckermann & Alistair Hunt, 2003. "Transaction costs of the Kyoto Mechanisms," Climate Policy, Taylor & Francis Journals, vol. 3(3), pages 261-278, September.
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    More about this item

    Keywords

    Climate change; CDM carbon offset market; Voluntary carbon offset; Competition; Complementarity; Standards; Carbon credits; Sustainable development;
    All these keywords.

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