IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v38y2010i2p1004-1009.html
   My bibliography  Save this article

Extracting the resource rent from the CDM projects: Can the Chinese Government do better?

Author

Listed:
  • Liu, Xuemei

Abstract

The revenue generated from a CDM project in China will be shared by the government and the project owner, and is also subject to the corporate income tax. This paper studies the impacts of the revenue sharing policy and income tax on the CDM market. The economic model presented in this paper shows that higher-cost CDM projects will be more affected by the CDM policies than lower-cost projects. In addition, the majority of CERs will be generated from lower-cost projects. This kind of distribution of CERs across different types of CDM projects, which is in line with the current picture of the CDM market in China, is not consistent with the goal of sustainable development. A simulation shows that a type-by-type tax/fee scheme would be more effective in assisting sustainable development than the current CDM policies. The study also suggests the government use negative tax/fee with the type-by-type scheme to subsidize the CDM projects that generate large sustainability benefits but would otherwise not be developed due to high costs. If all of the revenue from the CDM is recycled, it is estimated that CERs generation will increase by 98.28Â MtC, mainly from the CDM projects that have substantial sustainability benefits for the host country.

Suggested Citation

  • Liu, Xuemei, 2010. "Extracting the resource rent from the CDM projects: Can the Chinese Government do better?," Energy Policy, Elsevier, vol. 38(2), pages 1004-1009, February.
    • Handle: RePEc:eee:enepol:v:38:y:2010:i:2:p:1004-1009
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301-4215(09)00811-8
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. 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.
    2. Michaelowa, Axel & Jotzo, Frank, 2005. "Transaction costs, institutional rigidities and the size of the clean development mechanism," Energy Policy, Elsevier, vol. 33(4), pages 511-523, March.
    3. Liu, Xuemei, 2008. "Rent extraction with a type-by-type scheme: An instrument to incorporate sustainable development into the CDM," Energy Policy, Elsevier, vol. 36(6), pages 1873-1878, June.
    4. Frank Jotzo & Axel Michaelowa, 2002. "Estimating the CDM market under the Marrakech Accords," Climate Policy, Taylor & Francis Journals, vol. 2(2-3), pages 179-196, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Uddin, Noim & Blommerde, Mascha & Taplin, Ros & Laurence, David, 2015. "Sustainable development outcomes of coal mine methane clean development mechanism Projects in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 45(C), pages 1-9.
    2. Hu, Yu & Monroy, Carlos Rodríguez, 2012. "Chinese energy and climate policies after Durban: Save the Kyoto Protocol," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(5), pages 3243-3250.
    3. Simon Quemin & Christian Perthuis, 2019. "Transitional Restricted Linkage Between Emissions Trading Schemes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(1), pages 1-32, September.
    4. Vasa, Alexander & Neuhoff, Karsten, 2011. "The Role of CDM Post-2012," EconStor Research Reports 65871, ZBW - Leibniz Information Centre for Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Liu, Xuemei, 2008. "The monetary compensation mechanism: An alternative to the clean development mechanism," Ecological Economics, Elsevier, vol. 66(2-3), pages 289-297, June.
    2. Liu, Xuemei, 2008. "Rent extraction with a type-by-type scheme: An instrument to incorporate sustainable development into the CDM," Energy Policy, Elsevier, vol. 36(6), pages 1873-1878, June.
    3. Christoph Böhringer & Thomas Rutherford & Marco Springmann, 2015. "Clean-Development Investments: An Incentive-Compatible CGE Modelling Framework," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 60(4), pages 633-651, April.
    4. Mendoza Beltran, Angelica & den Elzen, Michel G.J. & Hof, Andries F. & van Vuuren, Detlef P. & van Vliet, Jasper, 2011. "Exploring the bargaining space within international climate negotiations based on political, economic and environmental considerations," Energy Policy, Elsevier, vol. 39(11), pages 7361-7371.
    5. repec:zbw:hohpro:354 is not listed on IDEAS
    6. Anger, Niels & Böhringer, Christoph & Moslener, Ulf, 2007. "Macroeconomic Impacts of the Clean Development Mechanism: The Role of Investment Barriers and Regulations," ZEW Discussion Papers 07-026, ZEW - Leibniz Centre for European Economic Research.
    7. Hultman, Nathan E. & Pulver, Simone & Guimarães, Leticia & Deshmukh, Ranjit & Kane, Jennifer, 2012. "Carbon market risks and rewards: Firm perceptions of CDM investment decisions in Brazil and India," Energy Policy, Elsevier, vol. 40(C), pages 90-102.
    8. Suzi Kerr & Adam Millard-Ball, 2012. "Cooperation To Reduce Developing Country Emissions," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 3(04), pages 1-30.
    9. Kallbekken, Steffen & Flottorp, Line S. & Rive, Nathan, 2007. "CDM baseline approaches and carbon leakage," Energy Policy, Elsevier, vol. 35(8), pages 4154-4163, August.
    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.
    11. Brechet, Thierry & Lussis, Benoit, 2006. "The contribution of the clean development mechanism to national climate policies," Journal of Policy Modeling, Elsevier, vol. 28(9), pages 981-994, December.
    12. repec:old:wpaper:354 is not listed on IDEAS
    13. Lee, Hyounkyu & Park, Taeil & Kim, Byungil & Kim, Kyeongseok & Kim, Hyoungkwan, 2013. "A real option-based model for promoting sustainable energy projects under the clean development mechanism," Energy Policy, Elsevier, vol. 54(C), pages 360-368.
    14. Bohringer, Christoph & Rutherford, Thomas F. & Springmannc, Marco, 2013. "Clean-development investments : an incentive-compatible CGE modeling framework," Policy Research Working Paper Series 6720, The World Bank.
    15. Nicole Grunewald & Inmaculada Martínez-Zarzoso, 2009. "Driving Factors of Carbon Dioxide Emissions and the Impact from Kyoto Protocol," Ibero America Institute for Econ. Research (IAI) Discussion Papers 190, Ibero-America Institute for Economic Research.
    16. Stua, Michele, 2013. "Evidence of the clean development mechanism impact on the Chinese electric power system's low-carbon transition," Energy Policy, Elsevier, vol. 62(C), pages 1309-1319.
    17. Stankeviciute, Loreta & Kitous, Alban & Criqui, Patrick, 2008. "The fundamentals of the future international emissions trading system," Energy Policy, Elsevier, vol. 36(11), pages 4272-4286, November.
    18. Georgiou, P. & Tourkolias, C. & Diakoulaki, D., 2008. "A roadmap for selecting host countries of wind energy projects in the framework of the clean development mechanism," Renewable and Sustainable Energy Reviews, Elsevier, vol. 12(3), pages 712-731, April.
    19. U. Kalpagam & Karimullah, 2007. "India's Business Prospects in the Global Emissions Market," Global Business Review, International Management Institute, vol. 8(2), pages 237-250, December.
    20. Pérez Domínguez, Ignacio & Britz, Wolfgang & Holm-Müller, Karin, 2009. "Trading schemes for greenhouse gas emissions from European agriculture: A comparative analysis based on different implementation options," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 90(3).
    21. 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.
    22. Axel Michaelowa & Katharina Michaelowa, 2011. "Climate business for poverty reduction? The role of the World Bank," The Review of International Organizations, Springer, vol. 6(3), pages 259-286, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:38:y:2010:i:2:p:1004-1009. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.