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Navigating the global carbon market: An analysis of the CDM's value chain and prevalent business models

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  • Schneider, Malte
  • Hendrichs, Holger
  • Hoffmann, Volker H.

Abstract

From a slow start, the clean development mechanism (CDM) market has recently experienced enormous growth. However, the CDM market has been increasingly criticised, resulting in a lively debate about how to reform, complement, or replace it. In order to increase transparency and assist policy-makers in better understanding the current market, we depart from the traditional project-level perspective on CDM and analyse commercial activities by utilising data from UNEP Risoe's CDM Bazaar. To this end, we first establish a seven-step value chain by conducting a factor analysis on the commercial activities indicated in the Bazaar and, second, identify nine prevalent business models with a cluster analysis of all 495 participating organisations. Based on these analyses, we discuss potential impacts on the value chain of different policy scenarios that rely on carbon credits as incentive. We find that the importance of specific regulatory CDM know-how and general business activities such as finance varies strongly with the different policy scenarios. Our analysis serves to sensitise policy-makers and business about implications of different regulatory designs.

Suggested Citation

  • Schneider, Malte & Hendrichs, Holger & Hoffmann, Volker H., 2010. "Navigating the global carbon market: An analysis of the CDM's value chain and prevalent business models," Energy Policy, Elsevier, vol. 38(1), pages 277-287, January.
  • Handle: RePEc:eee:enepol:v:38:y:2010:i:1:p:277-287
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    References listed on IDEAS

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    2. repec:wbk:wboper:13404 is not listed on IDEAS
    3. Schneider, Malte & Holzer, Andreas & Hoffmann, Volker H., 2008. "Understanding the CDM's contribution to technology transfer," Energy Policy, Elsevier, vol. 36(8), pages 2920-2928, August.
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    6. Harald Winkler & Niklas Höhne & Michel Den Elzen, 2008. "Methods for quantifying the benefits of sustainable development policies and measures (SD-PAMs)," Climate Policy, Taylor & Francis Journals, vol. 8(2), pages 119-134, March.
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    1. Watts, David & Albornoz, Constanza & Watson, Andrea, 2015. "Clean Development Mechanism (CDM) after the first commitment period: Assessment of the world׳s portfolio and the role of Latin America," Renewable and Sustainable Energy Reviews, Elsevier, vol. 41(C), pages 1176-1189.

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    Keywords

    CDM Business models Climate policy;

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