IDEAS home Printed from https://ideas.repec.org/a/eme/arjpps/v23y2010i3p243-253.html
   My bibliography  Save this article

Establishing additionality: fraud vulnerabilities in the clean development mechanism

Author

Listed:
  • Jacqueline M. Drew
  • Michael E. Drew

Abstract

Purpose - The purpose of this paper is to explore the clean development mechanism (CDM) which creates carbon credits from emission abatement projects in developing economies. The paper aims to examine the operation of the CDM with specific reference to fraud vulnerabilities regarding the additionality of a project. An examination of the process of establishment, certification and verification of additionality (confirmation that emissions post‐implementation of the CDM project are lower than those that would have occurred under the most plausible alternative scenario) is used to highlight the need for particular vigilance in respect to sustaining and improving the integrity of future market‐based mechanisms post‐Kyoto. Design/methodology/approach - The study takes a case study approach, examining the CDM project cycle and associated key entities. Findings - The study posits that the processes associated with establishing and verifying additionality of a project are potentially key areas of systemic weakness that must be addressed. This case study explores the design features of the CDM that may afford greater opportunities for fraudulent or deceptive practices. Originality/value - The CDM takes a project‐by‐project approach to establishment, verification and certification of additionality. Whilst conceptually this design may be appropriate from an operational perspective, it potentially provides opportunities for fraudulent outcomes. The individualised approach is, by its very nature, highly resource‐intensive and inherently difficult to verify.

Suggested Citation

  • Jacqueline M. Drew & Michael E. Drew, 2010. "Establishing additionality: fraud vulnerabilities in the clean development mechanism," Accounting Research Journal, Emerald Group Publishing Limited, vol. 23(3), pages 243-253, November.
  • Handle: RePEc:eme:arjpps:v:23:y:2010:i:3:p:243-253
    DOI: 10.1108/10309611011092574
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/10309611011092574/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers

    File URL: https://www.emerald.com/insight/content/doi/10.1108/10309611011092574/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers

    File URL: https://libkey.io/10.1108/10309611011092574?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

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

    Other versions of this item:

    References listed on IDEAS

    as
    1. Aldy,Joseph E. & Stavins,Robert N. (ed.), 2007. "Architectures for Agreement," Cambridge Books, Cambridge University Press, number 9780521692175, January.
    2. Aldy,Joseph E. & Stavins,Robert N. (ed.), 2007. "Architectures for Agreement," Cambridge Books, Cambridge University Press, number 9780521871631, January.
    3. World Bank & International Finance Corporation & Multilateral Investment Guarantee Agency, 2008. "Development and Climate Change," World Bank Publications - Reports 28200, The World Bank Group.
    4. Jacqueline M. Drew & Michael E. Drew, 2010. "The Identification of Ponzi Schemes: Can a Picture Tell a Thousand Frauds?," Discussion Papers in Finance finance:201008, Griffith University, Department of Accounting, Finance and Economics.
    5. World Bank & International Finance Corporation & Multilateral Investment Guarantee Agency, 2008. "Development and Climate Change," World Bank Publications - Reports 28201, The World Bank Group.
    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. Matthew A. Cole & David J. Maddison & Liyun Zhang, 2020. "Testing the emission reduction claims of CDM projects using the Benford’s Law," Climatic Change, Springer, vol. 160(3), pages 407-426, June.
    2. Kai Hockerts & Lisa Hehenberger & Stefan Schaltegger & Vanina Farber, 2022. "Defining and Conceptualizing Impact Investing: Attractive Nuisance or Catalyst?," Journal of Business Ethics, Springer, vol. 179(4), pages 937-950, September.
    3. Wim Carton & Adeniyi Asiyanbi & Silke Beck & Holly J. Buck & Jens F. Lund, 2020. "Negative emissions and the long history of carbon removal," Wiley Interdisciplinary Reviews: Climate Change, John Wiley & Sons, vol. 11(6), November.
    4. Patrick Hamshere & Liam Wagner, 2012. "Potential Impacts of Subprime Carbon on Australia’s Impending Carbon Market," Energy Economics and Management Group Working Papers 14, School of Economics, University of Queensland, Australia.
    5. Hui Chen & Peter Letmathe & Naomi Soderstrom, 2021. "Reporting Bias and Monitoring in Clean Development Mechanism Projects," Contemporary Accounting Research, John Wiley & Sons, vol. 38(1), pages 7-31, March.
    6. Karen Benson & Peter M Clarkson & Tom Smith & Irene Tutticci, 2015. "A review of accounting research in the Asia Pacific region," Australian Journal of Management, Australian School of Business, vol. 40(1), pages 36-88, February.
    7. Meine Noordwijk & Fahmuddin Agus & Sonya Dewi & Herry Purnomo, 2014. "Reducing emissions from land use in Indonesia: motivation, policy instruments and expected funding streams," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 19(6), pages 677-692, August.

    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. Thomas L. Brewer, 2008. "International Energy Technology Transfers for Climate Change Mitigation - What, who, how, why, when, where, how much … and the Implications for International Institutional Architecture," CESifo Working Paper Series 2408, CESifo.
    2. Olga Golubeva, 2017. "Does Perception of Business Climate Differ Between Foreign and Local Investors. A Firm-level Study of Transition Economies in Eastern Europe and Central Asia," Applied Economics and Finance, Redfame publishing, vol. 4(2), pages 113-128, March.
    3. Emanuele Massetti, 2011. "Carbon tax scenarios for China and India: exploring politically feasible mitigation goals," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 11(3), pages 209-227, September.
    4. Christoph Böhringer & Jared C. Carbone & Thomas F. Rutherford, 2018. "Embodied Carbon Tariffs," Scandinavian Journal of Economics, Wiley Blackwell, vol. 120(1), pages 183-210, January.
    5. Valentina Bosetti & Jeffrey Frankel, 2014. "Sustainable Cooperation In Global Climate Policy: Specific Formulas And Emission Targets," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 5(03), pages 1-34.
    6. Seidman, Laurence & Lewis, Kenneth, 2009. "Compensations and contributions under an international carbon treaty," Journal of Policy Modeling, Elsevier, vol. 31(3), pages 341-350, May.
    7. Joseph E. Aldy & William A. Pizer, 2009. "Issues in Designing U.S. Climate Change Policy," The Energy Journal, , vol. 30(3), pages 179-210, July.
    8. Kempf, Hubert & Rossignol, Stéphane, 2013. "National politics and international agreements," Journal of Public Economics, Elsevier, vol. 100(C), pages 93-105.
    9. Frankel, Jeffrey A. & Bosetti, Valentina, 2011. "Politically Feasible Emission Target Formulas to Attain 460 ppm CO[subscript 2] Concentrations," Working Paper Series rwp11-016, Harvard University, John F. Kennedy School of Government.
    10. Zarsky, Lyuba, 2010. "Climate-Resilient Industrial Development Paths: Design Principles and Alternative Models," Working Papers 179080, Tufts University, Global Development and Environment Institute.
    11. Martimort, David & Sand-Zantman, Wilfried, 2011. "A Mechanism Design Approach to Climate Agreements," TSE Working Papers 11-251, Toulouse School of Economics (TSE), revised 30 Apr 2013.
    12. Marc N. Conte & Matthew J. Kotchen, 2010. "Explaining The Price Of Voluntary Carbon Offsets," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 1(02), pages 93-111.
    13. Thomas Norman & Heinrich H. Nax, 2011. "Leading the Way: Coalitional Stability in Technological Cooperation & Sequential Climate Policy," Economics Series Working Papers 585, University of Oxford, Department of Economics.
    14. Frankel, Jeffrey, 2008. "Global Environmental Policy and Global Trade Policy," Working Paper Series rwp08-058, Harvard University, John F. Kennedy School of Government.
    15. Anup Sinha, 2012. "Sustainable Development and Governance: Complex Processes and Unpredictable Outcomes," IIM Kozhikode Society & Management Review, , vol. 1(1), pages 11-20, January.
    16. Méjean, Aurélie & Hope, Chris, 2010. "Modelling the costs of energy crops: A case study of US corn and Brazilian sugar cane," Energy Policy, Elsevier, vol. 38(1), pages 547-561, January.
    17. Phillip M. Hannam & Vítor V. Vasconcelos & Simon A. Levin & Jorge M. Pacheco, 2017. "Incomplete cooperation and co-benefits: deepening climate cooperation with a proliferation of small agreements," Climatic Change, Springer, vol. 144(1), pages 65-79, September.
    18. Warwick McKibbin & Peter Wilcoxen & Wing Thye Woo, 2008. "China Can Grow And Still Help Prevent The Tragedy Of The Co2 Commons," CAMA Working Papers 2008-14, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    19. Richard Stewart & Michael Oppenheimer & Bryce Rudyk, 2013. "A new strategy for global climate protection," Climatic Change, Springer, vol. 120(1), pages 1-12, September.
    20. repec:dau:papers:123456789/4521 is not listed on IDEAS
    21. Joseph E. Aldy & William A. Pizer, 2015. "The Competitiveness Impacts of Climate Change Mitigation Policies," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 2(4), pages 565-595.

    More about this item

    Keywords

    Fraud; Pollution; Project management;
    All these keywords.

    JEL classification:

    • G00 - Financial Economics - - General - - - General

    Statistics

    Access and download statistics

    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:eme:arjpps:v:23:y:2010:i:3:p:243-253. 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: Emerald Support (email available below). General contact details of provider: .

    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.