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A Cross-Country Empirical Analysis of Determinants of Clean Development Mechanism (CDM) Projects

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  • Kasai, Katsuya

Abstract

The CDM seems to play a significant role in international GHG reduction activities. Yet, a few emerging countries have hosted majority of CDM projects whereas most LDCs have not hosted CDM projects at all. Given the current distributional imbalance, this study aims to identify determinants of CDM project hosting based on an empirical analysis using the tobit model. On the basis of the literature review, this study focuses on two factors, namely the host countries’ qualities of business environment and scientific level. As a result, this study finds the significance of business environment for both bilateral and unilateral CDM projects. Likewise, the significance of scientific and technical level is confirmed especially for unilateral CDM projects. Finally, this article suggests that eligible host countries should focus exclusively on the improvement of controllable determinants such as business environment to attract CDM investors. In addition, it is likely to be better for eligible host countries with low GHG emissions to develop CDM projects unilaterally using programmatic CDM due to their lower economic attractiveness.

Suggested Citation

  • Kasai, Katsuya, 2011. "A Cross-Country Empirical Analysis of Determinants of Clean Development Mechanism (CDM) Projects," MPRA Paper 52160, University Library of Munich, Germany, revised Jan 2012.
    • Handle: RePEc:pra:mprapa:52160
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    References listed on IDEAS

    as
    1. Raubenheimer, Stefan & Michaelowa, Axel & Jahn, Michael & Liptow, Holger, 2004. "Measuring the Potential of Unilateral CDM: A Pilot Study," HWWA Discussion Papers 263, Hamburg Institute of International Economics (HWWA).
    2. Alexandros Flamos, 2010. "The clean development mechanism—catalyst for wide spread deployment of renewable energy technologies? or misnomer?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 12(1), pages 89-102, February.
    3. Axel Michaelowa, 2007. "Unilateral CDM—can developing countries finance generation of greenhouse gas emission credits on their own?," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 7(1), pages 17-34, March.
    4. Jahn, Michael & Michaelowa, Axel & Raubenheimer, Stefan & Liptow, Holger, 2004. "Measuring the Potential of Unilateral CDM - A Pilot Study -," Discussion Paper Series 26400, Hamburg Institute of International Economics.
    5. Muller, Adrian, 2007. "How to make the clean development mechanism sustainable--The potential of rent extraction," Energy Policy, Elsevier, vol. 35(6), pages 3203-3212, 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. 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.
    8. Dinar, Ariel & Mahfuzur Rahman, Shaikh & Larson, Donald & Ambrosi, Philippe, 2008. "Factors Affecting Levels Of International Cooperation In Carbon Abatement Projects," Policy Research Working Paper Series 4786, The World Bank.
    9. Amemiya, Takeshi, 1984. "Tobit models: A survey," Journal of Econometrics, Elsevier, vol. 24(1-2), pages 3-61.
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    Cited by:

    1. Kasai, Katsuya, 2012. "Factors Affecting the Distribution of CERs: A Cross-Sectional Empirical Analysis," MPRA Paper 52163, University Library of Munich, Germany, revised Jan 2013.
    2. Kasai, Katsuya, 2012. "How can LDCs benefit from the CDM?: A panel data analysis of determinants of CDM project hosting," MPRA Paper 52137, University Library of Munich, Germany, revised Dec 2012.

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    More about this item

    Keywords

    CDM; Kyoto Protocol; unequal distribution; business environment; tobit model;
    All these keywords.

    JEL classification:

    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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