Can the Clean Development Mechanism (CDM) deliver?

The paper investigates whether the Clean Development Mechanism (CDM) under the Kyoto Protocol has played a significant role in the development of rural communities, specifically investigating uptake of small-scale renewable energy projects. The investigation involved an assessment of 500 registered small-scale CDM projects under the Kyoto Protocol in terms of their potential impact on the envisaged sustainable development goals for rural communities. Five case studies from the Indian subcontinent were also examined.     

Sweet carbon: An analysis of sugar industry carbon market opportunities under the clean development mechanism

Bagasse power generation projects provide a useful framework for evaluating several key aspects of the Clean Development Mechanism of the Kyoto Protocol. On the positive side, our analysis, which draws in part from a data set of 204 bagasse electricity generation projects at sugar mills, indicates that these projects provide Annex I country investors with a cost-effective means to achieve greenhouse gas emissions reductions. Our analysis also confirms that the marketplace for Clean Development Mechanism-derived offsets is robust and competitive. Moreover, bagasse projects appear to provide a positive example in a “new wave” of clean energy investment that has replaced the earlier industrial gas projects. At the same time, we also identify two aspects of the CDM that demand improvement. First, the additionality standard needs to be tightened and made more transparent and consistent. Financial additionality should be required for all projects; however, any financial additionality test applied by the Clean Development Mechanism's Executive Board must be informed by the significant barriers faced by many projects. Second, the administrative processes for registration and verification of offsets need to be streamlined in order to prevent long registration time lags from chilling clean energy investment.     

The Kyoto mechanisms and the prospects for renewable energy technologies

The Kyoto Protocol to the Climate Change Convention sets out legally binding emission targets and timetables for developed countries. In order to ease compliance, it allows countries to achieve their emission targets through the ‘Kyoto Mechanisms’. These mechanisms comprise International Emissions Trading (ET), Joint Implementation (JI), and a Clean Development Mechanism (CDM). This paper analyses the capacity of the proposed mechanisms of the Kyoto Protocol to promote investment in renewable energy technologies (RETs). Analysis of abatement costing studies indicates that the increasing use of renewable energy tends to be a higher cost option compared with other greenhouse gas (GHG) abatement technologies. This finding, however, does not make RETs unattractive for GHG mitigation as such because, apart from their vast technical potential to reduce GHG emissions, RETs have great capacity to contribute to other aspects of sustainable development. The extent of investment into renewable energy induced by the Kyoto mechanisms will depend on whether the rules and guidelines that are to be developed in the coming years will explicitly support renewables. The Kyoto mechanisms could be instrumental in leading to significant investment into these resources if rules are defined appropriately.     

CDM项目开发现状与发展趋势

清洁发展机制(CDM)是《京都议定书》确定的一个基于市场的灵活机制,发展中国家通过与发达国家进行温室气体减排贸易,可以引进国外资金和环境友好的先进技术,促进本国能源结构和环境的改善.     

Solar energy: Markets, economics and policies

Solar energy has experienced phenomenal growth in recent years due to both technological improvements resulting in cost reductions and government policies supportive of renewable energy development and utilization. This study analyzes the technical, economic and policy aspects of solar energy development and deployment. While the cost of solar energy has declined rapidly in the recent past, it still remains much higher than the cost of conventional energy technologies. Like other renewable energy technologies, solar energy benefits from fiscal and regulatory incentives, including tax credits and exemptions, feed-in-tariff, preferential interest rates, renewable portfolio standards and voluntary green power programs in many countries. The emerging carbon credit markets are expected to provide additional incentives to solar energy deployment; however, the scale of incentives provided by the existing carbon market instruments, such as, the Clean Development Mechanism of the Kyoto Protocol is limited. Despite the huge technical potential, the development and large scale deployment of solar energy technologies world-wide still has to overcome a number of technical, financial, regulatory and institutional barriers. The continuation of policy supports might be necessary for several decades to maintain and enhance the growth of solar energy in both developed and developing countries.     

Encouraging the implementation of small renewable electricity CDM projects: An economic analysis of different options

Apart from contributing to the mitigation of GHG emissions, the deployment of renewable electricity Clean Development Mechanism projects (RE-CDM) may provide substantial local economic, social and environmental sustainability benefits to host countries. However, in spite of these advantages, a wide array of barriers prevents the realisation of these projects. They compete with other CDM options which lead to cheaper GHG emissions reductions but which do not provide as much opportunities for sustainable development in developing countries. Taking into account that, in contrast to GHG benefits, sustainability benefits are not valued in the market place and that article 12 of the Kyoto Protocol envisages two objectives for the CDM (cost-effective emissions reductions and contribution to sustainability), this market mechanism might be leading to a “market failure” in RE-CDM projects. This paper explores the different barriers affecting the implementation of RE-CDM projects and proposes and analyses several policies and measures that could be implemented to encourage their deployment by tackling those obstacles.     

中国水泥行业CDM项目发展现状及对策

本文介绍了清洁发展机制（CDM）的背景和其合格性要求,以及中国水泥行业的CDM项目发展现状。分析了水泥行业CDM项目中存在的一些问题;并就水泥行业开展CDM项目的重点领域进行了阐述。     

The evolving role of carbon finance in promoting renewable energy development in China

The world is negotiating what the international climate change regime will look like after 2012—the year that current Kyoto Protocol greenhouse gas emissions reduction targets expire—and the future of the Clean Development Mechanism (CDM) is under discussion. Critics claim the scale of reductions that the CDM is driving in the developing world is insufficient from a scientific perspective if we are to avoid dangerous climate change, that the project-by-project crediting process is inefficient, and that the reductions being achieved are not “additional”—meaning they would have happened anyway and thus should not be financially supported. Yet, the efficacy of CDM must be examined in the broader context of carbon mitigation in the developing world and the actions that are taking place. This paper examines the role that the CDM has played in promoting renewable energy development in China in order to assess how international carbon finance can best be used to help promote emissions mitigation in the developing world. It also assesses how several options under consideration for reforming the current structure of the CDM in particular and developing country engagement in general may impact renewable energy development in China in the coming years.     

Global warming mitigation and renewable energy policy development from the Kyoto Protocol to the Copenhagen Accord—A comment

Global warming is a grave environmental issue that has caught the attention of the globe. Due to the consequences of global warming, UNFCCC has established the Kyoto Protocol and the Copenhagen Accord as measures of combating climate change due to the emission of greenhouse gases. It has been three years since the first commitment period of the Kyoto Protocol and the Copenhagen Accord was just newly established. Therefore, there is a necessity to evaluate the performance of the Kyoto Protocol and to comment upon the Copenhagen Accord in its contributions toward climate change mitigation. Major greenhouse gas (GHG) emitters who are among the Kyoto Protocol ratifying developed nations exhibit the potential to achieve the desired Kyoto pledges through the aid of Clean Development Mechanisms (mainly from using renewable energy), as proposed in the Kyoto Protocol. However, the nullifying effects from non-ratified major emitters like the US and ratified but still developing countries have difficulties in adhering to the Kyoto Protocol. The Copenhagen Accord, on the other hand, is considered to be less ambitious and provides limited financial aid through the Copenhagen Green Climate Fund. The formulation of such a document indicates that modern societies continues to waste time in negotiations that emphasize on individual economic and political advantages, rather than taking into account true global considerations. It raises questions regarding how much time is needed before we decide to fully commit to the effective and collective efforts of climate change mitigation.     

Implementation of RES projects within the framework of the Clean Development Mechanism

Specific features of proposals on the implementation of the Clean Development Mechanism (CDM) projects within the framework of the Kyoto Protocol are described. It is noted that the implementation of these projects (RES projects being most attractive) will make it possible to attract additional investments and new technologies to the country’s national economy. Criteria of the choice of the CDM projects and the sustainable development parameters are considered.     

Development challenges under the Clean Development Mechanism (CDM)—Can renewable energy initiatives be put in place before peak oil?

The “Sustainable Development” aspect of the Clean Development Mechanism (CDM) under the Kyoto Protocol is examined, with regard to its current impact on crucial developmental issues.     

中国清洁发展机制项目现状分析

清洁发展机制（CDM）是《京都议定书》框架下的一种双赢机制,它帮助发达国家实现其部分温室气体减排义务．同时帮助发展中国家实现可持续发展。CDM项目必须经国内批准、国际注册后才能开始减排量的监测与统计．并要通过EB严格的审核才可以签发CERs。截至2009年6月12日,中国已有118个CDM项目的减排量获得签发．合计签发减排总量达1．32×10^8t二氧化碳当量,占EB签发总减排量的44．55％。随着我国CDM项目的逐步多元化,新能源和可再生能源项目所占比例会进一步增长。中国政府从CDM项目获得的收益作为中国清洁发展机制基金,用于支持与气候变化相关的活动,企业自留的CDM收益资金只能用于与本项目产能无关的节能减排或可持续发展项目。     

The future of the European Emission Trading System and the Clean Development Mechanism in a post-Kyoto world

This paper discusses developments in the markets for CO₂ emissions rights since the Kyoto Protocol was signed. The different emissions trading schemes, dominated by the Emission Trading System of the European Union and the Clean Development Mechanism, are surveyed. These schemes will need to be incorporated into any post-Kyoto multilateral agreement. Drawing on a simple model, the paper analyzes the incentives that developing and developed countries face for continuing or transforming the Clean Development Mechanism in the light of future agreements for a worldwide emissions control program.     

Knowledge base determinants of technology sourcing in clean development mechanism projects

The Clean Development Mechanism (CDM) is one of the three greenhouse gas emission reduction and trading instruments of the Kyoto Protocol (KP). The CDM allows governments and business entities from developed countries to offset their emissions liabilities by reducing or avoiding emissions in developing countries, where it is often cheaper to do so. Our results reveal that the majority of the CDM projects utilise local sources of technology. We attempt to explain technology sourcing patterns in CDM projects through the use of knowledge based determinants. Our empirical analysis indicates that in countries with a stronger knowledge base in climate friendly technologies, CDM project implementers tend to use local, as well as a combination of local and foreign technologies, more than foreign technologies.     

Explaining the differential distribution of Clean Development Mechanism projects across host countries

The Clean Development Mechanism (CDM) of the Kyoto Protocol represents an opportunity to involve all developing countries in the effort to reduce greenhouse gas emissions while also promoting sustainable development. To date, however, the majority of CDM projects have gone to emerging markets such as China, India, Brazil, and Mexico, while very few least developed countries have hosted projects. This paper investigates the differential distribution of CDM activities across countries. We develop a conceptual model for project profitability, which helps to identify potential country-level determinants of CDM activity. These potential determinants are employed as explanatory variables in regression analysis to explain the actual distribution of projects. Human capital and greenhouse gas emission levels influenced which countries have hosted projects and the amount of certified emission reductions (CER) created. Countries that offered growing markets for CDM co-products, such as electricity, were more likely to be CDM hosts, while economies with higher carbon intensity levels had greater CER production. These findings work against the least developed countries and help to explain their lack of CDM activity.     

Promoting bioenergy through the clean development mechanism

This paper explores the potential of the Clean Development Mechanism (CDM) of the Kyoto Protocol to promote modern bioenergy options in developing countries. The starting point is that developing countries need to be given a major role in the implementation of the Convention on Climate Change because of their increasing energy demands and the pressing need to mitigate climate change. The role of CDM is discussed in the context of sustainable development, formation of carbon markets, and promotion of bioenergy options. Besides contributing to mitigate climate change, CDM can be used to demonstrate and disseminate new technologies, reduce investment risks and enhance the cost-efficiency of projects, while also creating jobs and improving environmental conditions. In this context, bioenergy projects are attractive and CDM provides a complementary bridge for international cooperation towards sustainable development. However, since CDM is project-based, a broader policy framework is needed to integrate such projects in regional and global bioenergy systems solutions.     

Technology transfer to Africa: Constraints for CDM operations

It is practically difficult to design, implement and manage Clean Development Mechanism (CDM) projects in Africa without a provision for capacity building that will enable the application of modern technologies and techniques. Existing institutions need strengthening, human capacity needs to be developed and new markets need to be promoted. Patrick Karani, World Bank outlines institutional and market constraints in relation to technology transfer (e.g renewable energy technologies) and development in Africa.     

The policy challenges of tradable credits: A critical review of eight markets

This article offers a critical review of eight tradable permit markets: water permits at Fox River, Wisconsin; the U.S. leaded gasoline phase-out; sulfur dioxide credits under the U.S. Clean Air Act Amendments of 1990; the Regional Clean Air Incentives Market (RECLAIM) for controlling ozone and acid rain in Southern California; renewable energy credit trading at the regional level in the United States; individual transferrable quotas for fisheries at the national level in New Zealand; carbon credits traded under the European Union-Emissions Trading Scheme; and carbon offsets permitted under the Clean Development Mechanism of the Kyoto Protocol. By “critical” the article does not fully weigh the costs and benefits of each tradable credit scheme and instead identifies key challenges and problems. By “review” the author relied exclusively on secondary data from an interdisciplinary review of the academic literature. Rather than performing as economic theory suggests, the article shows that in many cases credit markets are prone to compromises in program design, transaction costs, price volatility, leakage, and environmental degradation. The article concludes by discussing the implications of these problems for those seeking to design more equitable and effective public policies addressing environmental degradation and climate change.     

Trends in renewable energy strategy development and the role of CDM in Bangladesh

This article analyses and discusses trends in renewable energy strategy development in Bangladesh and the prospective role of the clean development mechanism (CDM) under the Kyoto Protocol. Use of renewables for electricity generation results in less greenhouse gas emissions compared with fossil fuel energy systems and often offers additional synergistic benefits. Despite the large potential for development of renewable energy sources in Bangladesh, currently their contribution to electricity generation remains insignificant. Existing policies and programs on renewable energy in Bangladesh are reviewed in relation to the specific requirements needed for CDM. A number of barriers are identified that impede the implementation of the CDM mechanism. Overall, it is recommended that more appropriate energy strategies, including a new national renewable energy strategy, need to be formulated and implemented and more suitable institutional settings need to be provided to promote energy sustainability for Bangladesh. Also, the suggestion is made that incorporation of objectives for CDM promotion in the new national renewable energy strategy to tie in with Bangladesh's CDM strategy should assist in advancement of renewables.     

CDM项目的风险与控制

《京都议定书》下的清洁发展机制(CDM)属于新生事物,其规则程序复杂,并受到国际气候变化谈判进程的制约,造成实施CDM项目所面临的风险高于普通项目,项目开发难度大、费用高。这些风险将影响项目的构架和减排交易的形成。从中国CDM项目的开发商和有关咨询单位来看,应提高风险意识,加强对CDM项目存在的风险的认识、理解、防范和控制,提高项目投资决策的科学性和可靠性。