Climate cooperation from Kyoto to Paris: What can be learnt from the CDM experience?

The mitigation of greenhouse gas concentration has become a first-order issue for decision making in environmental sustainability. Countries can meet their mitigation commitments and environmental objectives through multiple instruments. A key role is played by cooperative mechanisms, such as the Clean Development Mechanism (CDM), under the Kyoto Protocol, and a similar mechanism established by the Paris Agreement (Art. 6), whose implementation rules are still under negotiation. However, another form of cooperation was already established under the different framework of the Official Development Assistance (ODA), potentially sharing abatement purposes. This paper aims to compare the mitigation actions implemented either as CDM or ODA projects. We conduct a multi-criteria econometric analysis, based on an originally created, harmonised dataset that merges renewable energy CDM projects and comparable ODA projects to investigate the role of the institutional framework in influencing the effectiveness of reducing emissions worldwide. Results show that the Kyoto Protocol had a positive impact in terms of cost-effectiveness for renewable energy projects and that it stimulated policy actions for environmental sustainability. Accordingly, in view of the implementation of Article 6 of the Paris Agreement, it is extremely important both to look to the past to draw lessons from Kyoto's successes and failures and to apply multi-criteria decision-making approaches for the design of environmental policies.