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Towards an effective implementation of clean development mechanism projects in China

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  • Zhang, ZhongXiang

Abstract

With the already huge and growing amount of greenhouse gas emissions and a great deal of low-cost abatement options available, China is widely expected as the world’s number one host country of clean development mechanism (CDM) projects. But, making this potential a reality represents a significant challenge for China, because there has been a general lack of awareness by both the Chinese government and business communities, clear institutional structure, and implementation strategy. This has raised great concern about China’s ability to compete internationally for CDM projects and exploit fully its CDM potential. This paper aims to address how CDM projects will be effectively implemented in China by examining the major CDM capacity building projects in China with bilateral and multilateral donors, the treatment of low-cost, non-priority CDM projects, and how a system for application, approval and implementation of CDM projects is set up in China and what roles the main institutional actors are going to play in the system. We conclude that these capacity building assistances, the establishment of streamlined and transparent CDM procedures and sound governance, and the lessons learned and experience gained from the implementation of the CDM project in Inner Mongolia and the two Prototype Carbon Fund (PCF)’ projects will help China to take advantage of CDM opportunities. Moreover, in order to further capitalize on its CDM potential, there is a pressing need for the Chinese government to amend its current interim CDM regulations, in particular those controversial provisions on the eligibility to participate in CDM projects in China and the distribution of the revenues derived from CDM project between the project developer and the Chinese government. We believe that taking these capacity building projects and the recommended actions to clearly define the sustainable development objective of the CDM and disseminate CDM knowledge to local authorities and project developers as sectorally and geographically wide as possible, addressing those controversial CDM provisions with clearer guidance, and gaining experience from real practice will reduce the perceived project risks and lower the barriers to CDM project development in China. This is, in turn, likely to lead a much greater percentage of carbon credits to come from CDM projects in China over the next several years.

Suggested Citation

  • Zhang, ZhongXiang, 2004. "Towards an effective implementation of clean development mechanism projects in China," MPRA Paper 13147, University Library of Munich, Germany, revised Jul 2005.
    • Handle: RePEc:pra:mprapa:13147
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    References listed on IDEAS

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    1. Franck Lecocq & Karan Capoor, "undated". "State and Trends of the Carbon Market 2005," World Bank Publications - Reports 13411, The World Bank Group.
    2. ZhongXiang Zhang, 2000. "Estimating the size of the potential market for the Kyoto flexibility mechanisms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 136(3), pages 491-521, September.
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    Cited by:

    1. Zhang, ZhongXiang, 2010. "Is it fair to treat China as a Christmas tree to hang everybody's complaints? Putting its own energy saving into perspective," Energy Economics, Elsevier, vol. 32(Supplemen), pages 47-56, September.
    2. Zhang, ZhongXiang, 2010. "China in the transition to a low-carbon economy," Energy Policy, Elsevier, vol. 38(11), pages 6638-6653, November.
    3. 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.
    4. Sudhakara Reddy, B. & Assenza, Gaudenz B., 2009. "The great climate debate," Energy Policy, Elsevier, vol. 37(8), pages 2997-3008, August.
    5. 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.
    6. 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.
    7. Jinshan Zhu, 2017. "Assessing China’s price review policy on Clean Development Mechanism projects," European Journal of Law and Economics, Springer, vol. 43(2), pages 285-316, April.
    8. 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.
    9. 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.
    10. Jinshan Zhu, 2014. "Assessing China's discriminative tax on Clean Development Mechanism projects. Does China's tax have so many functions?," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 57(3), pages 447-466, March.
    11. Ruiyue Jia & Xiumei Guo & Dora Marinova, 2013. "The role of the clean development mechanism in achieving China’s goal of a resource-efficient and environmentally friendly society," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 15(1), pages 133-148, February.
    12. 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.
    13. 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.
    14. Zhang, ZhongXiang, 2008. "Asian energy and environmental policy: Promoting growth while preserving the environment," Energy Policy, Elsevier, vol. 36(10), pages 3905-3924, October.
    15. 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.
    16. 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).
    17. Maraseni, Tek Narayan, 2013. "Selecting a CDM investor in China: A critical analysis," Energy Policy, Elsevier, vol. 53(C), pages 484-489.
    18. Stephanie Byrom & Sebastian Thomas & Paul Dargusch, 2014. "Millennium development goals and clean development: synergies in the Pacific," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 19(1), pages 33-44, January.
    19. Adenle, Ademola A. & Manning, Dale T. & Arbiol, Joseph, 2017. "Mitigating Climate Change in Africa: Barriers to Financing Low-Carbon Development," World Development, Elsevier, vol. 100(C), pages 123-132.
    20. Xie, Huiming & Shen, Manhong & Wang, Rui, 2014. "Determinants of clean development mechanism activity: Evidence from China," Energy Policy, Elsevier, vol. 67(C), pages 797-806.

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    More about this item

    Keywords

    Clean development mechanism; Capacity building; Charge/tax scheme; China; Price of CERs; Sustainable development;
    All these keywords.

    JEL classification:

    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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