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The Clean Development Mechanism in a world carbon market

Author

Listed:
  • Thierry Brechet
  • Yann Ménière

    (CERNA i3 - Centre d'économie industrielle i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique)

  • Pierre Picard

Abstract

This paper discusses the role of the Clean Development Mechanism (CDM) in the market for carbon quotas and countries' commitments to reduce their carbon emission levels. We show that the CDM contributes to an efficient funding of clean technology investments in least developed countries. However, the CDM is not neutral on the global level of carbon emissions as it entices countries to raise their emission caps. The CDM may also make inappropriate the inclusion of any country that takes no emission abatement commitment. It can even make inefficient a country's decision to commit to an emission target. The implications of the presence of non‐additional projects are also analyzed. Cet article analyse le rôle du Mécanisme pour un Dèveloppement Propre (MDP) dans un marché de quotas carbone et d'engagements des pays pour réduire leurs émissions de carbone. Nous montrons que le MDP contribue à un financement efficace dans des technologies propres dans les pays les moins développés. Cependant, le MDP n'est pas neutre sur le niveau global des émissions de carbone car il pousse les pays à relever leurs plafonds d'émission. Le MDP est également susceptible de rendre inappropriée l'inclusion dans le marché carbone d'un pays qui ne s'engagerait pas à des réductions contraignantes. Il peut même rendre inefficace la décision d'un pays de s'engager sur un plafond d'émission. Les implications de la présence éventuelle de projets non‐additionnels est également discutée.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Thierry Brechet & Yann Ménière & Pierre Picard, 2016. "The Clean Development Mechanism in a world carbon market," Post-Print hal-01471162, HAL.
    • Handle: RePEc:hal:journl:hal-01471162
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    Cited by:

    1. Strand, Jon, 2016. "Mitigation incentives with climate finance and treaty options," Energy Economics, Elsevier, vol. 57(C), pages 166-174.
    2. Thierry Bréchet & Carmen Camacho & Vladimir M. Veliov, 2012. "Adaptive Model-Predictive Climate Policies in a Multi-Country Setting," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00718659, HAL.
    3. Thomas Baudin & David de la Croix & Paula E. Gobbi, 2015. "Fertility and Childlessness in the United States," American Economic Review, American Economic Association, vol. 105(6), pages 1852-1882, June.
    4. Nora, Vladyslav & Uno, Hiroshi, 2014. "Saddle functions and robust sets of equilibria," Journal of Economic Theory, Elsevier, vol. 150(C), pages 866-877.
    5. Knut Rosendahl & Jon Strand, 2015. "Emissions Trading with Offset Markets and Free Quota Allocations," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 61(2), pages 243-271, June.
    6. Venkatachalam ANBUMOZHI, 2015. "Low Carbon Green Growth in Asia: What is the Scope for Regional Cooperation?," Working Papers DP-2015-29, Economic Research Institute for ASEAN and East Asia (ERIA).
    7. Strand, Jon, 2013. "Strategic climate policy with offsets and incomplete abatement: Carbon taxes versus cap-and-trade," Journal of Environmental Economics and Management, Elsevier, vol. 66(2), pages 202-218.
    8. Jon Strand, 2019. "Combining Carbon Taxation and Offset Payments: A New Approach to Climate Policy in Low-Income Countries," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(3), pages 949-960, November.
    9. Thomas Baudin & David de La Croix & Paula Gobbi, 2012. "DINKs, DEWKs & Co. Marriage, Fertility and Childlessness in the United States," Working Papers hal-00993307, HAL.
    10. Sabine Aresin, 2015. "Reduced Allowability and the Allocation of Emission Abatement," Working Papers tax-mpg-rps-2015-12, Max Planck Institute for Tax Law and Public Finance.
    11. Fabio Antoniou & Panos Hatzipanayotou & Nikos Tsakiris, 2021. "Strategic Export Motives and Linking Emission Markets," CESifo Working Paper Series 8847, CESifo.

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    Keywords

    carbon market;

    JEL classification:

    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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