Is it fair to treat China as a Christmas tree to hang everybody's complaints? Putting its own energy saving into perspective

Is it Fair to Treat China as a Christmas Tree to Hang Everybody's Complaints? Putting its Own Energy Saving into Perspective

China had been the world’s second largest carbon emitter for years. However, recent studies show that China had overtaken the U.S. as the world’s largest emitter in 2007. This has put China on the spotlight, just at a time when the world community starts negotiating a post-Kyoto climate regime under the Bali roadmap. China seems to become such a Christmas tree on which everybody can hang his/her complaints. This paper first discusses whether such a critics is fair by examining China’s own efforts towards energy saving, the widespread use of renewable energy and participation in clean development mechanism. Next, the paper puts carbon reductions of China’s unilateral actions into perspective by examining whether the estimated greenhouse gas emission reduction from meeting the country’s national energy saving goal is achieved from China’s unilateral actions or mainly with support from the clean development mechanism projects. Then the paper discusses how far developing country commitments can go in an immediate post-2012 climate regime, thus pointing out the direction and focus of future international climate negotiations. Finally, emphasizing that China needs to act as a large and responsible developing country and take due responsibilities and to set a good example to the majority of developing countries, the paper articulates what can be expected from China to illustrate that China can be a good partner in combating global climate change.

Toward an effective implementation of clean development mechanism projects in China

Towards an Effective Implementation of CDM Projects in China

Stakeholder preferences towards the sustainable development of CDM projects: Lessons from biomass (rice husk) CDM project in Thailand

PTTEP Siam Limited (PTTEPS), a subsidiary of PTT Exploration and Production Public Company Limited (PTTEP), has pioneered a Clean Development Mechanism (CDM) project that takes aim at recovering and then using associated gas from the oil wells of Thailand’s Sao Thian-A field. Situated in the S1 Concession area in Sukhothai Province, the Sao Thian-A field has produced approximately 1.5 MMscfd of associated gas and 1,900 BPD of crude oil. Without a CDM project, this associated gas, comprised primarily of methane with lesser amounts of other energy rich hydrocarbons, would have simply been continued to have been flared and more greenhouse gases would have been released into the atmosphere. At its core, the CDM project involved the installation of a gas treatment system to filter out hydrocarbon droplets from the associated gas prior to its internal use and sale to external facility. The CDM Project has indeed helped the whole facility become more economically viable for further investment in similar such additional CDM units. The CDM project was approved by the Designated National Authority of Thailand in December 2010. Key benefits of applying CDM to the overall Project included reduction of GHG emissions, which in turn, increased the global energy efficiency of the oil field; the reduction of non-renewable energy use; and the encouragement of best practice of associated oil management among oil and gas operators in Thailand. In addition to revenue gain from carbon emission reduction trading, this Project has fulfilled score-based criteria for national sustainable development evaluation: natural resources and environment, social, technology transfer and development, and economic growth. This CDM application within a petroleum exploration and production project is Thailand’s first! If this Project receives final approval and is officially registered by the CDM Executive Board, it will no doubt encourage other operators in Thailand to initiate their own participation in this business.

The Clean Development Mechanism (CDM) has been internationally implemented as a part of the Kyoto Mechanism to reduce Greenhouse Gases (GHG) for mitigating climate change. Although forest is considered as the only carbon sink and its significance has increased, the number of registered Afforestation/Reforestation (A/R) CDM projects has recently decreased. Also, the Paris agreement, the new regime of climate change, sets to outline Sustainable Development Mechanisms (SDMs) to substitute CDM including A/R CDM, but the rulebook does not finalize yet. Therefore, it is essential to review the status of registered A/R CDM projects to build a best practice model on forestry sectors before entering the new framework. This study would research A/R CDM projects implemented in India, which is the most active country to be interested in Afforestation and Reforestation. The used materials were 19 Project Design Documents for A/R CDM projects in India, including statistical and spatial data. Those documents were used to identify the status and analyze the environmental and socio-economic factors in the study area. As Sustainable Development Goals (SDGs) is important during project decision making process, the relationship between current CDM projects and SDGs, the other important framework to be achieved, used for the analysis. The major project areas were in Uttar Pradesh carried out by Divisional Forest Officer (DFO) from Indian administration. The climates of A/R CDM projects areas including Uttar Pradesh were mostly warm, dry, and well-drained, and the native plants were highly preferred. Unlike the other project areas, Uttar Pradesh was economically worse, which means that the area was highly related to SDG 2 and 15. This research could contribute to achieving SDGs by matching each goal with the environmental and socio-economic factors. Throughout the matching, host countries could select the suitable factors to achieve SDGs by implementing the A/R CDM projects. This study would suggest the framework which should be considered before implementing A/R CDM or other projects related to forestry sectors. As a result, it could be connected to respond to climate change, forest management, and GHG reduction ultimately.

The Clean Development Mechanism (CDM) under the Kyoto Protocol allows the crediting of emission reductions from greenhouse gas (GHG) abatement projects in developing countries. The CDM is an offsetting mechanism and, in principle, a zero game to the atmosphere: emission reductions achieved from CDM projects allow industrialised countries to increase their emissions, respectively. The article explores how the CDM could be moved beyond a pure offsetting mechanism in a post-2012 climate regime by crediting only a fraction of the emission reductions from CDM projects, thereby providing a net atmospheric benefit. Potential implications on the carbon market are assessed in a qualitative manner and different design options for such a reform to the CDM are discussed. An important conclusion is that the effects on carbon market depend considerably on whether the use of the CDM is limited through caps or not.

Financial support for Clean Development Mechanism (CDM) projects in under-represented host countries was agreed on at the 2009 Copenhagen climate conference. The EU rules include special import quotas for certified emission reductions (CERs) from least developed countries (LDCs). This paper discusses whether these measures can contribute to overcoming barriers to CDM development in LDCs, how programmes of activities (PoAs) are performing and how CDM projects and PoAs contribute to sustainable development (SD) in LDCs. CER supply and demand scenarios for 2013–2020 show that preferential access measures for LDCs would not have an important impact on CDM in these countries if the barriers for project implementation are not overcome. The specific CDM projects and PoAs found in LDCs yield potentially high SD benefits. Through a comparison between the climate regime and the Lomé Convention, a preferential access agreement in agricultural trade, we conclude that not just preferential access is important, but also reduced access costs and the removal of underlying barriers. Increased incentives for added-value products characterize Lomé's success stories. For the climate regime, this could be translated into additional financial incentives for CDM projects with added value. As LDCs host a high share of them, PoAs could constitute an opportunity here.

As one of the three mechanisms for reducing trans-boundary greenhouse gas emissions stipulated in the Kyoto Protocol, the CDM (Clean Development Mechanism) project was introduced in China as early as 2005; nowadays, great progress has been made in this field. Scholars have explored the impacts of the CDM projects on the air pollution control for over a decade. The article first summarizes the development of the first batch of the Chinese CDM projects, analyzing the panel data of 30 cities in China from 2006 to 2015 to investigate the impacts of the CDM projects on the air quality of the 30 capital cities. Meanwhile, the relationship between the number of the CDM projects and the GDP, the population size, and the government’s investment in industrial pollution control of each region is explored. The results show that the CDM projects positively impact air pollution control, and that they are positively correlated with the GDP, CPI and the population size. Moreover, there is a positive correlation between the government’s investment in industrial pollution control and the air quality but with a certain degree of hysteresis. The above findings provide the implications for the future development of the CDM projects including, these programs should be guided by the national policies and promoted as market-led economic projects, seeking to obtain the capital and technical support from developed countries so as to facilitate the Chinese enterprises’ environmental protection endeavors and the government should gradually guide the local enterprises’ input of capital and technology in order to achieve better results of air pollution control.

A review of the current application of N 2O emission reduction in CDM projects

Purpose – Since the registration of the first clean development mechanism (CDM) project in 2004, the CDM has seen a dynamic expansion: the CDM pipeline currently comprises 6,725 projects generating 2.73 billion certified emission reductions (CERs) up to 2012. These CERs result in a substantial financial flow from Annex I to Non-Annex I countries. But CDM projects also result in investments in low carbon technologies, a substantial share of which is focused on the energy sector. The total installed capacity of all CDM projects amounts to 288,944 MW. However, the CDM is not widely taken up in Africa. This holds true for Africa's share in the CDM project pipeline (2.62 per cent), for Africa's share in CERs generated up to 2012 (3.58 per cent) and for the normalized CERs per capita, per country. Two hypothesizes are commonly discussed: first, the continent features low per capita emissions and low abatement potentials. Second, African countries may be hampered by weak institutional frameworks. This article reviews both hypotheses and presents new empirical data. The paper aims to discuss these issues. Design/methodology/approach – Investigating the greenhouse gas (GHS) abatement potential of 16 energy-related sectors for 11 selected least developed countries in sub-Saharan Africa shows a total theoretical CDM potential of 128.6 million CERs per year. Analyzing investment indicators confirms that most countries are impeded by below average investment conditions. Findings – It is concluded that Africa offers a considerable range of substantial abatement potentials. However, the weak institutional framework is limiting the uptake of the CDM in Africa. This is underpinned by an analysis which shows if a CDM sector has high investment cost, Africa will have a low share in the sector. If the sector has low investment needs per CER, Africa's share in the CDM sector will be bigger. Investment needs and Africa's share in the pipeline feature a negative correlation. Research limitations/implications – Supporting CDM development in Africa should not be constraint to technical assistance. It will be crucial to develop an integrated financing approach, comprising the CDM as a co-financing mechanism, to overcome the institutional challenges. Originality/value – Until today, there are few empirical studies that use concrete criteria and indicators to show why the CDM is underrepresented in Africa. The work presented here contributes to filling this gap.

This chapter discusses the role and behaviour of the corporate sector in Clean Development Mechanism (CDM) projects by examining a case from Indonesia. The chapter reviews: the role of the private sector in the CDM process and the manner in which this has influenced the types of CDM projects; the benefits accrued to Indonesia from these projects; and the wider implications for sustainable development through the CDM scheme. It identifies several types of drivers for private sector involvement in CDM: viz. CSR, international obligations and profit-making. By analysing ongoing CDM projects in Indonesia, the issue of realisation of development impact through CDM is examined. Finally the chapter presents a series of recommendations for the country to encourage the private sector to play a greater role in the CDM scheme.

Technology transfer (TT) is not mandatory for Clean Development Mechanism (CDM) projects, yet proponents of CDM argue that TT in CDM can bring new technologies to developing countries and thus not only reduce emissions but also foster development. We review the quantitative literature on determinants of TT in CDM and estimate determinants for CDM projects in China. China is by far the largest host country of CDM projects and it is therefore crucial to understand the factors that drive TT there. To gain better interpretation, we focus on heterogeneity within a single country and results can thus be linked to specific policies of the country. Our probit estimations confirm previous international cross-country studies, indicating that larger projects and more advanced technologies are more likely to involve TT. In addition, we find evidence that agglomeration effects are more pronounced at the province level rather than larger regions. We also find a positive effect of foreign direct investment (FDI) on TT, and academic research and development (R&D) is complementary to TT.Policy relevanceTechnology transfer (TT) is a goal of Chinese CDM legislation, but it is not a prerequisite for project approval. Our estimations show the project specific, technological and region-specific features that encourage more TT among CDM projects. Some variables analysed such as R&D spending and FDI (both are found to have positive effects on TT) can be, to some extent, influenced by the policy-makers. Moreover, we find some evidence for the presence of negative agglomeration effects on the provincial level: the likelihood of TT is decreasing in the number of previous projects operating in the same technology and province. This finding needs to be interpreted with great caution. It may suggest the existence of a learning externality, which could serve as a justification for policy intervention. Any policy intervention requires however careful analysis of potential positive or negative externalities resulting from the agglomeration of CDM projects and a comparison of possible benefits with the costs of TT.

As the 2012 end of the first commitment period of the Kyoto Protocol is fast approaching, there is a strong realisation that the Clean Development Mechanism (CDM) projects have no doubt been playing an important role globally, particularly in promoting clean development in China. Consequently, the prospects for the CDM market in the post-Kyoto era are attracting a lot of attention, including from the developing countries. Based on a review of international and domestic sources, the paper analyses the progress in the development of CDM projects both globally and China. As at 2011, China has attracted the lion share of CDM investment with 45% of the world projects located in this country and they account for 63% of the global annual certified emission reductions under this mechanism. Due to the relative easiness of implementation, the main area of investment is new and renewable energy (representing 73% of China’s registered CDM projects). China’s fast economic development, open door investment policy, political stability, high educational and technological standards and reliable infrastructure are all encouraging the interest of foreign investors seeking to reduce their domestic carbon footprint. In order to facilitate the location of CDM projects, the Chinese government formulated a series of policies and regulations as well as establishing national coordinating groups for climate change, CDM Designated National Authorities and projects auditing boards, which are responsible for projects application, auditing and management. There are however large differences in the regional distribution of Chinese CDM projects. with certain areas of the country, such as its western regions, still in need of development opportunities. Provinces, such as Yunnan, Sichuan, Inner Mongolia, Hunan and Gansu (located in central and western China) are attracting more projects because of their rich hydro and wind resources while there are very few projects in the eastern already developed parts of the country. This trend is consistent with the CDM’s main goal to assist less developed regions to achieve a more sustainable development. Finally and most importantly, this study poses the question about the future prospects for the CDM market in a post-Kyoto world. While China has so far proven to be a success story, in most recent times the amount of investment has started to slow down in the lead to this uncertainty.