Clean Development Mechanism Projects Research Articles

Can New Energy Become a Breakthrough for Economic Development—Based on Clean Development Mechanism Projects in Less Developed Coastal Cities

Coastal cities have the natural resource endowment and location advantages to develop new energy. However, heterogeneity in the economic development of China’s coastal cities has led to differences in the outcomes of environmental regulatory policies and related programs. To elucidate the difference, this paper obtained 5074 clean development mechanism (CDM) projects, which serves as a key instrument of the Kyoto Protocol designed to assist developing countries in achieving sustainable development through project-based emissions reductions and conducted a causal identification through quasi-experiment. And DID as well as DDD models are applied to identify the CDM effects on cities’ economic development. Main findings are: (1) Through the DID regression, this paper finds that the development of CDM projects have promoted the development of the city’s economy and lead to the upgrading of cities’ industries. (2) The promoting effects in economic development and employment are more prominent in coastal cities with high levels of economic development. (3) CDM can better facilitate economic development and employment in less developed coastal areas when implemented in conjunction with economic promoting policies. By applying quasi-experimental methods, including DID and DDD models, the research introduces a novel approach to assess the causal effects of CDM projects on city economies, offering fresh insights into sustainable development policies.

The impact and mechanism analysis of Clean Development Mechanism on the synergistic effects of pollution mitigation and carbon reduction

The establishment of the Clean Development Mechanism (CDM) has greatly improved China's carbon emission trading system. However, due to the unbalanced development of CDM in China, the effects and mechanism of CDM on reducing pollution and carbon are still unclear. In order to explore the effects and mechanism of CDM on the synergistic effects of pollution mitigation and carbon reduction, we first set up a theoretical analysis framework. Utilizing panel data from 254 prefecture-level cities across China spanning from 2004 to 2021, we employ a synergy degree model of composite system to evaluate the synergistic effects of pollution mitigation and carbon reduction. By treating CDM as a quasi-natural experimental research subject, we construct a multi-period difference-in-difference model to assess the CDM projects' effects. Our findings indicate a positive association between CDM projects and the synergistic effects of pollution mitigation and carbon reduction. Heterogeneity analysis reveals that CDM projects located in the western region, areas with lower levels of economic development, non-resource cities, non-old industrial bases, and projects with Certified Emission Reductions issued exhibit the most pronounced synergistic effects. Specially, dynamic policy effect analysis shows that only non-resource cities and non-old industrial bases exhibit enhanced policy implementation regarding CDM. Mechanism analysis demonstrates that CDM primarily enhances synergistic effects through improved energy efficiency, technological innovation and energy transition. These findings enrich empirical investigations concerning market-driven emission reduction policy in China, shedding light on pivotal pathways for synergistic control of pollution mitigation and carbon reduction and offering valuable policy insights for comprehensive economic and social green transformation in China.

Environmental co-benefits of climate mitigation: Evidence from clean development mechanism projects in China

The carbon reduction effects of climate mitigation have received much attention, but less attention has been paid to the co-benefits of climate mitigation such as air pollution reduction and related health impacts. This oversight may have led to an underestimation of the broader welfare effects of climate mitigation and thus hindering its progress in implementation. This paper investigates the co-benefits of climate mitigation through focusing on the pollution reduction effects of the implementation of the clean development mechanism (CDM), which is an important climate mitigation mechanism to enhance north-south climate cooperation. Using a unique firm-level dataset with data on China's CDM projects from 1998 to 2012, we show that the CDM implementation reduced sulfur dioxide emissions. Mechanism analyses show that the CDM implementation alleviated firms' financing constraints and promoted fossil energy savings, thereby reducing emissions of air pollutants that usually coexist with greenhouse gases in burning fossil fuels. We also find that the CDM didn't bring about the expected technological progress. These results highlight environmental co-benefits of climate mitigation and provide important implications for international climate cooperation

Green Finance Initiatives to Improve Green Banking Practices in India

Green Finance Initiatives to Improve Green Banking Practices in India

Decarbonization and the obstacles to carbon credit accounting disclosure in financial statement reports: the case of UAE

PurposeThis study investigated the visibility of carbon emissions allowances accounting in the financial reports of 32 clean development mechanism (CDM) projects in the UAE to uncover the obstacles to setting consistent standards for carbon emission accounting. As carbon emissions are monetized as credits, consistent accounting standards can aid decision-makers in the development of carbon emission mitigation strategies.Design/methodology/approachThis study used a grounded theoretical framework for exploring the terms used in the policy documents of international accounting bodies regarding accounting standards and guidelines for carbon emission credits. Raw qualitative data were gathered, and an inductive approach was used by analyzing documents from various sources using the qualitative data text analysis software QDA Miner 6.FindingsThe findings showed that the financial statement reports of the corporations did not include disclosure of the carbon credit account. This omission was due to the lack of global standardization of carbon credit accounts and emission allowance recognition. This may hinder the production of a comprehensive report containing accurate and valuable financial information relevant to all stakeholders.Originality/valueThe study is among the first to use a grounded theoretical framework to investigate whether corporations are applying common standards and guidelines for carbon emissions accounting.

INDIGENOUS PEOPLE ENVIRONMENTAL RIGHTS VULNERABILITY TO CARBON TRADING MECHANISM: A LESSON LEARNED FOR INDONESIA

Developed countries are strictly obligated to reduce carbon emissions due to their industrial activities, contributing to a major concentration of greenhouse gases in the atmosphere. This paper aims to provide a basic overview of carbon reduction provisions under Kyoto Protocol and climate change frameworksdevelopment through the years. Practically in developing countries, its provision requires funding and transferring technology schemes by developed countries. The carbon markets emerged from Clean Development Mechanism (CDM) as a so-called eco-friendly project which potentially turns into a new form of capitalism in developing countries along with a tendency to depend on funding and transferring technology itself. Indigenous people are targeted groups directly affected by CDM projects and often neglect their fundamental rights. State is obligated to provide a forum for indigenous people to participate in the level of socializing, consultation, and law-making process of CDM as its nature being the most vulnerable group. Keywords: Carbon trade; climate change; environmental rights; indigenous people

Analysis of Clean Development Mechanism for Dernah Wind Farm (I) Project (Libya) by Using AM0019 Methodology

Since the Kyoto Protocol came into effect on Feb 16, 2005, the Clean Development Mechanism (CDM) has experienced significant global growth. This mechanism enables developing countries to actively engage in combating climate change by implementing projects aimed at reducing Greenhouse Gas Emissions (GGEs). In 2010, Libya established the Commission of the Designated National Authority (DNA) to oversee the implementation of the CDM. This move was made as part of Libya's efforts to develop a range of projects that qualify for CDM and contribute to reducing GGEs. The main motivation for conducting this study was the absence of Libya's involvement in global-level CDM projects, as evidenced by the United Nations Framework Convention on Climate Change (UNFCCC) annual reports. Additionally, the failure to recognize the significance of CDM in influencing decisions regarding investments in wind energy. This work aims to investigate the use of CDM in Dernah wind farm (I) project (Libya). The study used a suitable CDM methodology, AM0019 with the appropriate tool (03-V3), calculated as CO2 reductions and Certified Emission Reductions (CERs). The results of CDM analysis are as follows: CO2 reductions = 362,201.82 tCO2e/year and CERs for the first ten years of the age of the proposed wind farm (Dernah Wind Farm (ɪ)) (CERs10y) = 1,687,898,590 LD (320,838,371.8 €) for the first ten years, likewise CERs20y= 3,375,797,180 LD (641,676,743.5 €) during the entire life (20 years) of the proposed wind farm. Based on these results, it can be concluded that the project will be highly cost-effective, this will lead to lower electricity prices for consumers and higher profits for the project owners. Therefore, registering wind energy projects as CDM projects and earning CERs is the most practical way to promote wind energy. The findings of this study could be valuable for policy makers and project developers who are interested in CDM wind projects.

Exploring the scientific literature on clean development mechanisms: A bibliometric analysis

The Clean Development Mechanism (CDM) was established under Article 12 of the Kyoto Protocol to assist developed countries in reducing greenhouse gas (GHG) emissions by transferring technologies to developing countries and creating a carbon credit market. Despite playing a crucial role in reducing GHG emissions, the CDM faced market uncertainties, inadequate targets for GHG reduction among signatory countries, political and institutional obstacles that led to a decline in CDM projects after 2012. Currently, China, India, and Brazil have the highest percentage of registered CDM projects. The literature presents both evidence in favor of and against CDM projects. To evaluate the evolution and updates in the literature, a bibliometric analysis of 810 articles published between 1998 and 2021 was conducted. The USA had the highest number of published articles, followed by Germany and China, with Energy Policy and Climate Policy as the main journals for disseminating the topic. The study identified four main research axes that expanded into seven thematic groups. Additionally, the evolution of four lines of interest was evident over time, starting with the greenhouse effect and Kyoto Protocol, followed by economic and business aspects, sustainable development and energy policy, and finally, technological transfer and innovation.

Wasting CO2and the Clean Development Mechanism: The remarkable success of a climate failure

This paper examines how global climate mitigation policies articulate with urban political–ecological transformations. It focuses on South African waste-to-value projects as case studies, exploring how local processes of urban ecological modernization combine with global climate finance through the now largely defunct Clean Development Mechanism (CDM). Whilst it is generally recognized that waste-related CDM projects in South Africa (and elsewhere) have been an unmitigated failure in terms of climate and socio-economic benefits, we demonstrate that landfill-to-gas/energy projects have functioned effectively as geographical–discursive dispositifs through which particular knowledge systems are enrolled, specific ‘solutions’ are projected, and singular imaginaries of what is possible and desirable foregrounded, thereby crowding out alternative possibilities. This not only nurtures the commodification and marketization of non-human matter with an eye towards sustaining capital accumulation but, rather more importantly, successfully installs state-orchestrated private property relations around common resources, thereby deepening the dispossessing socio-ecological relations upon which expanded capitalist reproduction rests. We argue that whilst the formal outcome of the CDM is a failure, its success resides precisely in how it permitted local and global elites to create administrative and regulatory practices that solidify and naturalize a neoliberal market-based framework to approach the climate crisis.

Risk Management of Methane Reduction Clean Development Mechanism Projects in Rice Paddy Fields

Agriculture accounts for the largest share of anthropogenic methane emissions. Rice paddy fields emit a significant amount of methane gas worldwide. Changing paddy water management practices has an enormous potential to reduce greenhouse gases. The clean development mechanism (CDM) project uses a market mechanism to reduce methane through private participation. There are various risks associated with private investment in CDM projects, although carbon credits as an economic incentive assist in mitigating some of these risks. Farmer participation plays a key role in the success of paddy water management projects in rural areas; however, despite the significant potential to reduce global methane emissions, very few projects have been implemented. When designing a Sustainable Development Mechanism (SDM) system, it is crucial to understand why the market mechanism in the existing CDM projects has failed. This study identifies and categorizes the risks and barriers to paddy water management in CDM projects and analyzes risk management options in CDM projects in India, Indonesia, and Mozambique. The results of this study showed that aside from economic risks, barriers to the application of technology in the field pose critical risks. The lack of knowledge and implementation experiences in rural areas increases barriers to practice. This in turn causes risk of difficulties in technology transfer which can be alleviated by improving awareness and introducing new knowledge through education and training in rural project implementation. Additionally, we highlight the importance of international efforts to build governance between the private and public sectors and promote technology transfers through multi-stakeholder engagement. This study provides specific information to encourage methane reduction worldwide and vitalize rice paddy water management in carbon reduction projects.

Valuing investments in the Global Carbon Market Mechanism as compound real options: Lessons from the Clean Development Mechanism

AbstractThe Global Carbon Market Mechanism (GCMM) aims to incentivize national or sub‐national actors to invest in climate mitigation projects at the same time as limiting the global costs of tackling global warming. Using the worked example of the Clean Development Mechanism (CDM), this article shows that the exact valuation of a mitigation project requires the application of compound real options techniques, as it is able to account for the multi‐staged nature of a project cycle, as well as the two basic sources of uncertainty (the probability of not moving successfully to the next stage of the cycle, technical risk, and the uncertainty related to future emission reduction credit prices, market risk). Using parameters from the global database of registered CDM projects, this article illustrates that longer than projected lead times, higher than projected transaction costs, and higher than projected rates of failure lowered the value of investing in CDM projects considerably, alongside offset prices and their variability. Regulators of and participants within the patchwork of existing emission trading schemes and market mechanisms, including the GCMM (Article 6.4 of the Paris Agreement), could benefit through wider appreciation of the benefits of this valuation method.

Do solar photovoltaic clean development mechanism projects contribute to sustainable development in Latin America? Prospects for the Paris Agreement

Clean Development Mechanism (CDM) projects must include intended contributions to sustainable development in their scope, in addition to promoting the reduction of greenhouse gas emissions (GHG). Previous studies have identified expected co-benefits in CDM projects, nevertheless, they have not focused on solar photovoltaic energy. Although there is high solar irradiation in Latin American countries, there were only 25 registered solar photovoltaic CDM projects. In this study, we examine the intended co-benefits for sustainable development of solar photovoltaic CDM projects in Latin American countries and investigate the climate and energy policies that may have led to the low number of registrations for these projects in the region. The analysis was performed using the T-Lab software program through its Dictionary-Based Classification tool applied to the outlined indicators and criteria. The results indicate gaps in project contributions, for example, the technology transfer was mentioned as equipment and knowledge importation from other countries, which does not imply the development of the local solar industry; community engagement and equal gender opportunities continue to remain challenges, water quality and conservation of biodiversity issues were underscored, and the reducing the overuse competition between cropland and solar panel installation was overlooked. CDM was important to promote diversification in electricity generation in most Latin American countries, but not sufficient to improve the solar photovoltaic market. The main barriers to implementing these projects have been regulation and lack of incentives. The national energy and climate policies in the region should set guidelines/standards for assessing the co-benefits for the sustainable development of GHG reduction projects, aligned with the new carbon market mechanism rules and the UN-Agenda 2030.

Eco-efficient Prototype of Wastewater Treatment Plant Applying Clean Development Mechanism Methodologies – Mediterranean Countries

Municipal wastewater treatment is committed reducing greenhouse gases emissions in line with United Nations Framework Convention on Climate Change (UNFCCC) norms in order to preserve Earth's blanket and lower climate acute changes. Greenhouse gases emissions reduction is the avant-garde of municipal wastewater treatment technologies; however, the process requires particular segmentation of all phases to contain the excessive energy required for treatment. Consequently, Energy analysis is endorsed as essential to sustain a thermodynamic equilibrium of the treatment plant with its environment. Decarbonization, denitrification & phosphorus removal urge the exploitation of sustainable energy whether recovered or renewable to engine the treatment facility. This literature values compile the eco-design of wastewater treatment plant with the avant-garde technologies of greenhouse gases emissions reduction, considering environmental aspects at all stages of treatment process, targeting the lowest possible environmental impact throughout the plant life cycle to create a CO₂-free facility prototype. UNFCCC introduced the greenhouse gases emissions definition in wastewater plants as a project design document for the Clean Development Mechanism (CDM) project AM00801 activity. The literature adopted this project and submitted it as a friendly user interface or a Software to model an Eco-efficient management strategy for wastewater treatment plant aerobic activated sludge type with the offset of environmental footprint measures based on decision making analysis, Input-output analysis, benchmarking and energy balance, net negative emissions including environmental declaration assessing the life cycle from costing, management, and sustainability perspectives.

Do clean development mechanisms promote sustainable development in Brazil? a cross-sectoral investigation

PurposeThis paper intends to verify the extent to which Clean Development Mechanism (CDM) projects intend to contribute to sustainable development (SD) in Brazil, one of the top three leading countries in terms of the number of CDM projects. The authors assess the impact of CDMs not only in environmental aspects, but also social and economic ones.Design/methodology/approachThe authors define a set of qualitative sustainability indicators and scrutinize documents regarding a sample of almost half of all the projects registered in Brazil between 2004 and 2020 (219 projects).FindingsThe findings of this study contradict many previous studies finding very limited evidence of SD in CDMs in many different countries: most projects in Brazil intend to contribute to some extent with SD, with 91% and 75% claiming to improve social and economic aspects, respectively.Practical implicationsThe authors derive lessons from Brazil that can be used in other researches.Social implicationsThe authors derive lessons from Brazil and propose paths for public policy toward encouraging sustainable development.Originality/valueThe empirical data set relies on data collected directly from each of the projects in Brazil (roughly half of all of them) between 2004 and 2020. This is not only up to date, but pushes further the analytical scope of previous works.

Financial and environmental efficiency of CDM projects: Analysis and classification for investment decisions

AbstractThe main purpose of this paper is to analyze the efficiency of Clean Development Mechanism (CDM) projects implemented worldwide and understand their main characteristics, seeking to support investment decisions and expand the scientific understanding of the financial and environmental impact of these projects. To achieve this goal, a sample of 2352 CDM projects was selected from a United Nations Framework Convention on Climate Change (UNFCCC) database and analyzed first with a two‐stage data envelopment analysis (DEA) model that allowed the evaluation of the financial return and environmental efficiency of these projects. DEA results provide an efficiency ranking that was then analyzed with a classification tree (CHAID algorithm), revealing some main characteristics of the projects with higher efficiencies, like their sizes, locations, and type of CDM. CDMs are projects that demand a significant quantity of resources and effort to produce the expected outcomes, so it is crucial for public managers and investors to know the project profiles that generate the best financial and environmental results. In this sense, this study presents a completely original methodology for this kind of analysis and reveals important insights for these agents and researchers in this field.

Exploring the impact of environmental, social, and governance on clean development mechanism implementation through an institutional approach.

The study hypothesizes that the environmental, social, and governance (ESG) of the host country have a significant effect on clean development mechanism (CDM) implementation. As CDM incorporates sustainable development as one of the objectives for the green transition, many countries endeavor to adopt and implement CDM as their cleaner production method. Based on the institutional theory, the study aims to investigate the mechanism by which the institutional process of each ESG pillar makes an opportunity for a host country and to see how such country-specific factors influence the implementation of CDM projects. A county-year unbalanced sample drawn from World Bank and multinational CDM project data was analyzed using panel logistic and Poisson regression. Panel regression results show that high-energy intensity and low renewable electricity output as an environmental pillar positively affect CDM implementation. Unemployment and undernourishment as a social pillar positively affect CDM whereas low government effectiveness and the high rule of law positively affect CDM. In the results of zero-inflated Poisson regression, the direction of government effectiveness was upturned. The findings have broadened and deepened the ESG pillar based on the institutional theory and emphasized sustainable development rather than economic outputs.

Determinants of Investment Costs for CDM Projects in the Energy Industry

This study reviewed data from 1350 Clean Development Mechanism (CDM) project design documents for the energy industry; these projects were registered with the United Nations Framework Convention on Climate Change from the European Union Emissions Trading System’s second period (December 2012) to the present. This paper contributes to the literature on the energy industry in that it was the first attempt to directly estimate the issuance price based on CDM PDD data. This study extracted and databased effective samples for investment analysis. In addition, carbon emissions pricing analysis in the energy industry (which has the highest proportion in the CDM sector) was conducted to demonstrate which factors, including renewable energy technology, contribute to changing the investment cost per unit of carbon emissions. Cluster analysis shows that business methods and size are unimportant for classifying clusters; after multiple regression analysis, the technology variable was determined to affect investment cost. The issued price was low, in the order of biomass, wind power, hydropower, and waste heat management technology. The empirical results show that biomass technology has the highest investment efficiency, and the carbon emission issuance price of biomass technologies is lower than that of wind and solar technologies, which the Korean government is investing in actively. Therefore, if by-products and natural resources in rural areas are recycled or reused as biomass raw materials, costs can be reduced and linked to rural regeneration channels.

Emission reduction targets and outcomes of the Clean Development Mechanism (2005–2020)

The Clean Development Mechanism (CDM) allows developing countries to earn carbon credit units by reducing greenhouse gas emissions. Here we assess the emission reduction outcomes of the CDM between 2005 and 2020. The analysis covers 3,311 CDM projects hosted by 79 countries and over 10,000 Monitoring Reports. We identify which host countries and project types departed from original forecasts more. Overall, the total amount of actual emission reductions was 16% below the targets envisaged by project proponents. Emission reduction projects consistently under-performed over the year, but performance varied between and within regions. Industrial HFCs and N2O projects exceeded their targets, whereas landfill gas and methane avoidance projects under-performed by larger margins. Economic gains were unevenly distributed. Estimated revenues relative to GDP were higher for larger emerging economies, and disproportionately smaller for the deprived members of the Global South. Four host countries (China, India, South Korea and Brazil) not only dominated the market, but also gained an advantage from the higher carbon prices before 2012. Least Developed Countries had their carbon credits issued in more recent years when prices were much lower. The results show an imbalance in economic outcomes and raise questions about the effectiveness and equity of this Kyoto mechanism. Weak targets under Paris Agreement could intensify these challenges.

The clean development mechanism in Eastern Europe: an in-depth exploration

The Clean Development Mechanism (CDM), a partnership tool founded under the Kyoto Protocol, grants potential opportunities to help developing countries achieve sustainable development. The present research examines the CDM projects in Eastern Europe (Moldova, Serbia, Bosnia and Herzegovina, Montenegro, and Albania). Although there were far fewer projects in this region than, for instance, China or India, it has some specific features that make it worth studying. Major findings are that most CDM projects in Eastern Europe involved a changing combination of two or more sources of financing, and the distribution of projects in the region was uneven. Moreover, although there was a small number of projects overall, they were all cost-effective, long-term and large-scale. The findings of the research call for improvements to be made to the governance of the CDM, by strengthening the international and national regulation of projects and by aggregating the scales of decision-making and actions so that real multi-scalar transnational governance — from the global level down to the local level — is implemented in a coherent manner. It is also recommended to carry out ex-post project evaluations, following which readjustments could be made.

Take a ride on the (not so) green side: How do CDM projects affect Indian manufacturing firms’ environmental performance?

This study examines the causal impacts of the Clean Development Mechanism (CDM) on the environmental performance of Indian manufacturing firms, as measured by their energy use, carbon dioxide (CO2) emissions, and intensities of CO2 emissions per sales and per energy use. The impacts of CDM projects are estimated using either two-way fixed-effect regressions or an estimator built for an event study with staggered treatment (Sun and Abraham, 2021) combined with a sample of ever-treated firms only or a sample comparing treated to never-treated control firms using semi-parametric matching. We found that CDM projects significantly increased firms’ CO2 emissions and energy use after treatment, but had no effect on CO2 emission intensity per sales and only a small negative effect on the CO2 content of energy use (only for the matched sample). These results reveal that CDM projects led to a positive scale effect (increased sales) after investments were made, and that these investments triggered a limited emission-reducing technique effect (decreased CO2 intensity).