IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v39y2011i3p1132-1143.html
   My bibliography  Save this article

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

Author

Listed:
  • Winkelman, Andrew G.
  • Moore, Michael R.

Abstract

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.

Suggested Citation

  • Winkelman, Andrew G. & Moore, Michael R., 2011. "Explaining the differential distribution of Clean Development Mechanism projects across host countries," Energy Policy, Elsevier, vol. 39(3), pages 1132-1143, March.
  • Handle: RePEc:eee:enepol:v:39:y:2011:i:3:p:1132-1143
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301-4215(10)00860-8
    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. Noorbakhsh, Farhad & Paloni, Alberto & Youssef, Ali, 2001. "Human Capital and FDI Inflows to Developing Countries: New Empirical Evidence," World Development, Elsevier, vol. 29(9), pages 1593-1610, September.
    2. Karan Capoor & Philippe Ambrosi, "undated". "State and Trends of the Carbon Market 2009," World Bank Publications - Reports 13402, The World Bank Group.
    3. Krey, Matthias, 2005. "Transaction costs of unilateral CDM projects in India-results from an empirical survey," Energy Policy, Elsevier, vol. 33(18), pages 2385-2397, December.
    4. Jung, Martina, 2006. "Host country attractiveness for CDM non-sink projects," Energy Policy, Elsevier, vol. 34(15), pages 2173-2184, October.
    5. Samuel Fankhauser & Lucia Lavric, 2003. "The investment climate for climate investment: Joint Implementation in transition countries," Climate Policy, Taylor & Francis Journals, vol. 3(4), pages 417-434, December.
    6. van der Gaast, Wytze & Begg, Katherine & Flamos, Alexandros, 2009. "Promoting sustainable energy technology transfers to developing countries through the CDM," Applied Energy, Elsevier, vol. 86(2), pages 230-236, February.
    7. Globerman, Steven & Shapiro, Daniel, 2002. "Global Foreign Direct Investment Flows: The Role of Governance Infrastructure," World Development, Elsevier, vol. 30(11), pages 1899-1919, November.
    8. Gastanaga, Victor M. & Nugent, Jeffrey B. & Pashamova, Bistra, 1998. "Host Country Reforms and FDI Inflows: How Much Difference do they Make?," World Development, Elsevier, vol. 26(7), pages 1299-1314, July.
    9. Zhang, ZhongXiang, 2006. "Toward an effective implementation of clean development mechanism projects in China," Energy Policy, Elsevier, vol. 34(18), pages 3691-3701, December.
    10. 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.
    11. Asiedu, Elizabeth, 2002. "On the Determinants of Foreign Direct Investment to Developing Countries: Is Africa Different?," World Development, Elsevier, vol. 30(1), pages 107-119, January.
    12. Karan Capoor & Philippe Ambrosi, "undated". "State and Trends of the Carbon Market 2009," World Bank Publications - Reports 13403, The World Bank Group.
    13. Robert Oleschak & Urs Springer, 2007. "Measuring host country risk in CDM and JI projects: a composite indicator," Climate Policy, Taylor & Francis Journals, vol. 7(6), pages 470-487, November.
    14. repec:bla:kyklos:v:54:y:2001:i:1:p:89-113 is not listed on IDEAS
    15. Dechezleprêtre, Antoine & Glachant, Matthieu & Ménière, Yann, 2009. "Technology transfer by CDM projects: A comparison of Brazil, China, India and Mexico," Energy Policy, Elsevier, vol. 37(2), pages 703-711, February.
    16. Halsnaes, Kirsten, 2002. "Market potential for Kyoto mechanisms--estimation of global market potential for co-operative greenhouse gas emission reduction policies," Energy Policy, Elsevier, vol. 30(1), pages 13-32, January.
    17. Kumar, Nagesh, 1996. "Foreign Direct Investments and Technology Transfers in Development: A Perspective on Recent Literature," UNU-INTECH Discussion Paper Series 1996-06, United Nations University - INTECH.
    18. Steven Globerman & Daniel M Shapiro, 1999. "The Impact of Government Policies on Foreign Direct Investment: The Canadian Experience," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 30(3), pages 513-532, September.
    19. Seres, Stephen & Haites, Erik & Murphy, Kevin, 2009. "Analysis of technology transfer in CDM projects: An update," Energy Policy, Elsevier, vol. 37(11), pages 4919-4926, November.
    Full references (including those not matched with items on IDEAS)

    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. Mori-Clement, Yadira, 2019. "Impacts of CDM projects on sustainable development: Improving living standards across Brazilian municipalities?," World Development, Elsevier, vol. 113(C), pages 222-236.
    2. Alsan, Marcella & Bloom, David E. & Canning, David, 2006. "The effect of population health on foreign direct investment inflows to low- and middle-income countries," World Development, Elsevier, vol. 34(4), pages 613-630, April.
    3. Akhtaruzzaman, M. & Berg, Nathan & Hajzler, Christopher, 2017. "Expropriation risk and FDI in developing countries: Does return of capital dominate return on capital?," European Journal of Political Economy, Elsevier, vol. 49(C), pages 84-107.
    4. Jinshan Zhu & Hui Yao & Yingkai Tang & Liyong Wang, 2015. "An econometric analysis of sub-national Clean Development Mechanism performance in China," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 20(7), pages 1137-1153, October.
    5. Céline Azémar & Rodolphe Desbordes, 2009. "Public Governance, Health and Foreign Direct Investment in Sub-Saharan Africa," Journal of African Economies, Centre for the Study of African Economies, vol. 18(4), pages 667-709, August.
    6. Bailey, Nicholas, 2018. "Exploring the relationship between institutional factors and FDI attractiveness: A meta-analytic review," International Business Review, Elsevier, vol. 27(1), pages 139-148.
    7. Pécastaing, Nicolas, 2013. "L’impact du mécanisme de développement propre (MDP) sur le développement « durable » : le cas du Pérou," L'Actualité Economique, Société Canadienne de Science Economique, vol. 89(1), pages 39-56, Mars.
    8. Akinkugbe, Oluyele, 2003. "Flow of Foreign Direct Investment to Hitherto Neglected Developing Countries," WIDER Working Paper Series 002, World Institute for Development Economic Research (UNU-WIDER).
    9. Yixing Yang & Md. Qamruzzaman & Mohd Ziaur Rehman & Salma Karim, 2021. "Do Tourism and Institutional Quality Asymmetrically Effects on FDI Sustainability in BIMSTEC Countries: An Application of ARDL, CS-ARDL, NARDL, and Asymmetric Causality Test," Sustainability, MDPI, vol. 13(17), pages 1-29, September.
    10. Syed Hasanat Shah & Mohsin Hasnain Ahmad & Qazi Masood Ahmed, 2016. "The nexus between sectoral FDI and institutional quality: empirical evidence from Pakistan," Applied Economics, Taylor & Francis Journals, vol. 48(17), pages 1591-1601, April.
    11. Fathi Ali & Norbert Fiess & Ronald MacDonald, 2010. "Do Institutions Matter for Foreign Direct Investment?," Open Economies Review, Springer, vol. 21(2), pages 201-219, April.
    12. Mohsin Hasnain Ahmad & Qazi Masood Ahmed, 2014. "Does the Institutional Quality Matter to Attract the Foreign Direct Investment? An Empirical Investigation for Pakistan," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 15(1), pages 55-70, March.
    13. Hong, Jin & Guo, Xiumei & Marinova, Dora & Yang, Fengli & Yu, Wentao, 2013. "Clean development mechanism in China: Regional distribution and prospects," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 93(C), pages 151-163.
    14. 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.
    15. Bortoletto, Wagner Wilson & Pacagnella Junior, Antonio Carlos & Cabello, Otavio Gomes, 2023. "Exploring the scientific literature on clean development mechanisms: A bibliometric analysis," Energy Policy, Elsevier, vol. 183(C).
    16. Pauline Lacour & Jean-Christophe Simon, 2012. "Quelle intégration des pays en développement dans le régime climatique ? Le Mécanisme pour un Développement Propre en Asie," Post-Print halshs-00763231, HAL.
    17. Obeng, Camara Kwasi, 2014. "Effect of corporate tax on sector specific foreign direct investment in Ghana," MPRA Paper 58454, University Library of Munich, Germany.
    18. Kolstad, Ivar & Villanger, Espen, 2008. "Determinants of foreign direct investment in services," European Journal of Political Economy, Elsevier, vol. 24(2), pages 518-533, June.
    19. De Cian, Enrica & Tavoni, Massimo, 2012. "Do technology externalities justify restrictions on emission permit trading?," Resource and Energy Economics, Elsevier, vol. 34(4), pages 624-646.
    20. Asamoah, Michael Effah & Adjasi, Charles K.D. & Alhassan, Abdul Latif, 2016. "Macroeconomic uncertainty, foreign direct investment and institutional quality: Evidence from Sub-Saharan Africa," Economic Systems, Elsevier, vol. 40(4), pages 612-621.

    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:39:y:2011:i:3:p:1132-1143. 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.