“…■ It has often been noted that the CDM does not lead to global emission reductions but is, at best, a mechanism that offsets emission increases in Annex B countries (Chung, 2007;Schneider, 2009). In fact, the CDM may even contribute to a rise in global emissions, as many project activities have diffi culty in demonstrating additionality, i.e.…”
Section: Concerns About the Functioning Of The Cdmmentioning
confidence: 99%
“…■ Asian and Latin American countries make up more than 95% of the projects and certifi ed emission reductions (CERs) in the CDM project pipeline (UNEP/Risø, 2010), raising concerns about the equitable regional and sub-regional distribution of projects (UNFCCC, 2008a; see also Cosbey et al, 2006;). ■ The unequal distribution of CDM projects among sectors has also been noted, with the transport and building sectors, both key for achieving ambitious climate targets, almost completely absent from the project portfolio (Zegras, 2007;Schneider, 2009). ■ Certain project types, notably the destruction of industrial gases such as HFC-23 and N 2 O, are thought to generate high windfall profi ts for project developers and host countries (Schatz, 2008;Wara and Victor, 2008).…”
Section: Concerns About the Functioning Of The Cdmmentioning
confidence: 99%
“…In addition, discounting may also be a way of dealing with inherent uncertainty in establishing baselines and additionality. Therefore, this option has significant potential to increase the environmental effectiveness of the CDM (Schneider, 2009). If CER issuance caps or (in)eligibility to host projects in certain host countries were coupled with an incentive for these countries to provide their own contribution to climate change mitigation (beyond the CDM's offsetting approach), this would also result in emission reduction benefits.…”
Section: Can Differentiation In the Cdm Address The Concerns?mentioning
CLIMATE POLICY 11 (2011) 752-767Policy-makers and scientists have raised concerns about the functioning of the Clean Development Mechanism (CDM), in particular regarding its low contribution to sustainable development, unbalanced regional and sectoral distribution of projects, and its limited contribution to global emission reductions. Differentiation between countries or project types has been proposed as a possible way forward to address these problems. An overview is provided of the different ways in which CDM differentiation could be implemented. The implications for the actors involved in the CDM are analysed, along with a quantitative assessment of the impacts on the carbon market, using bottom-up marginal abatement cost curves. The discounting of CDM credits, quota systems, or differentiated eligibility of countries could help to address several of the concerns raised. Preferential treatment may also make a limited contribution to achieving the aims of CDM differentiation by increasing opportunities for under-represented host countries. The impact on the carbon market appears to be limited for most options.
Keywords
“…■ It has often been noted that the CDM does not lead to global emission reductions but is, at best, a mechanism that offsets emission increases in Annex B countries (Chung, 2007;Schneider, 2009). In fact, the CDM may even contribute to a rise in global emissions, as many project activities have diffi culty in demonstrating additionality, i.e.…”
Section: Concerns About the Functioning Of The Cdmmentioning
confidence: 99%
“…■ Asian and Latin American countries make up more than 95% of the projects and certifi ed emission reductions (CERs) in the CDM project pipeline (UNEP/Risø, 2010), raising concerns about the equitable regional and sub-regional distribution of projects (UNFCCC, 2008a; see also Cosbey et al, 2006;). ■ The unequal distribution of CDM projects among sectors has also been noted, with the transport and building sectors, both key for achieving ambitious climate targets, almost completely absent from the project portfolio (Zegras, 2007;Schneider, 2009). ■ Certain project types, notably the destruction of industrial gases such as HFC-23 and N 2 O, are thought to generate high windfall profi ts for project developers and host countries (Schatz, 2008;Wara and Victor, 2008).…”
Section: Concerns About the Functioning Of The Cdmmentioning
confidence: 99%
“…In addition, discounting may also be a way of dealing with inherent uncertainty in establishing baselines and additionality. Therefore, this option has significant potential to increase the environmental effectiveness of the CDM (Schneider, 2009). If CER issuance caps or (in)eligibility to host projects in certain host countries were coupled with an incentive for these countries to provide their own contribution to climate change mitigation (beyond the CDM's offsetting approach), this would also result in emission reduction benefits.…”
Section: Can Differentiation In the Cdm Address The Concerns?mentioning
CLIMATE POLICY 11 (2011) 752-767Policy-makers and scientists have raised concerns about the functioning of the Clean Development Mechanism (CDM), in particular regarding its low contribution to sustainable development, unbalanced regional and sectoral distribution of projects, and its limited contribution to global emission reductions. Differentiation between countries or project types has been proposed as a possible way forward to address these problems. An overview is provided of the different ways in which CDM differentiation could be implemented. The implications for the actors involved in the CDM are analysed, along with a quantitative assessment of the impacts on the carbon market, using bottom-up marginal abatement cost curves. The discounting of CDM credits, quota systems, or differentiated eligibility of countries could help to address several of the concerns raised. Preferential treatment may also make a limited contribution to achieving the aims of CDM differentiation by increasing opportunities for under-represented host countries. The impact on the carbon market appears to be limited for most options.
Keywords
“…Discounting CDM emission reductions means that not all reductions generated by a project enter the carbon market, so that part of the effort is not used to offset emissions elsewhere, but provides real global GHG emission reductions (Schneider, 2008).…”
Section: Discounting Emission Creditsmentioning
confidence: 99%
“…These concerns are politically founded on the second goal of the CDM, which is to contribute to sustainable development in its host countries. Further, more autonomous climate mitigation action by advanced developing countries (beyond just offsetting) is needed to achieve the long-term environmental goals of the climate convention, which would mean that a system for gradually phasing out the CDM in these countries is needed (Cosbey et al, 2005;Schneider, 2008).…”
As currently designed and implemented, the Clean Development Mechanism (CDM) under the Kyoto Protocol is a market mechanism that creates 'offset' credits, named CERs (certifi ed emission reductions). These credits are issued to Annex I Parties that invest in projects both reducing emissions and contributing to sustainable development in developing countries. This paper explores how CER weights could be used to reform and improve this mechanism. On the one hand, weights strictly lower than 1, or discount factors, would improve the environmental effectiveness of the CDM, enhancing global greenhouse gas emission mitigation while addressing the additionality concern. On the other hand, weights higher than 1, or multiplication factors, could increase the competitiveness of project types and/or host countries currently underrepresented in the CDM pipeline. This paper concentrates on stimulating investment from developed nations to less developed countries and aims at reducing the disparity between the three main CDM host countries (Brazil, India and China) and less developed nations. Based on statistical data published by the United Nations Framework Convention on Climate Change, our analysis then considers different policies, estimates their impacts, and shows how a sensible mix of discounting and multiplication could lead to a more equitable geographical distribution of CDM projects and possibly create atmospheric benefi ts.drawbacks of this approach. We fi rst analyse the environmental effectiveness of the CDM, and thus call for discounting only and then consider the uneven distribution of CDM project activities, a problem that would best be handled through a sensible mix of discounting and multiplication. promoting sustainable development and fl exibility. 9 In particular, Michaleowa (2008) proposed an approach in which the discount factor would be linked to the level of development of the host country (the development index being defi ned as a combination of per-capita income and per-capita emissions thresholds).
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