What matters in the distributions of clean development mechanism projects? A panel data approach

Abstract

The Clean Development Mechanism (CDM) suggests that both developed and developing countries can take actions to mitigate global climate change. Carbon reduction and sustainable development are the goals of the CDM. However, the uneven distribution of the CDM projects in developing countries may jeopardize the fulfilment of these goals. This paper uses panel data from 107 host countries to explore the influencing factors of the CDM using a negative binomial regression. The club convergence model is used to divide the host countries into different sub-groups according to their numbers of operating CDM projects in a year. The results show that affluence, the sophisticated international trading experience, and the growing demands for energy of the host countries have a positive impact on the successful registrations of the CDM projects, while the cost of carbon emission abatement hinders the registration. But for countries with fewer CDM projects, the industrial level and national carbon emission have no significant impacts on the distribution of CDM projects. In the end, target policy implications were made based on the results.