Abstract

National greenhouse gas emission reduction targets should be realized mainly through domestic efforts, but also through emission reductions abroad. Some countries plan to use international carbon market mechanisms to acquire the Certified Emission Reductions. Korea also plans to use voluntary cooperation under Article 6 of the Paris Agreement as a supplementary measure to achieve our NDC. Given the Korean government has decided to update its 2030 greenhouse gas emission reduction target to 40%, using the international carbon market is essential to achieve NDC. This study aims to identify a cost-effective way to acquire emission reductions abroad using the international carbon market. According to UNFCCC, the sustainable development mechanism under Article 6 of the Paris Agreement will be developed based on CDM under the Kyoto Protocol. This study reviews and analyzes the greenhouse gas mitigation cost of past CDM projects implemented under the Kyoto Protocol. CDMs allow to transfer emission reductions between countries. This study analyzes the cost-effectiveness of different CDM projects, especially those in Malaysia, by estimating marginal abatement cost. This study focuses on small-hydro, landfill gas, biomass energy, fuel switching, energy efficiency and methane avoidance CDM projects in Malaysia and estimates the marginal abatement cost (CER price). Methane avoidance projects had the lowest marginal abatement cost, indicating that they were the most cost-effective CDM projects in Malaysia.

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