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The Clean Development Mechanism in a world carbon market
Author(s) -
Bréchet Thierry,
Ménière Yann,
Picard Pierre M.
Publication year - 2016
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/caje.12244
Subject(s) - clean development mechanism , commit , carbon market , carbon fibers , business , mechanism (biology) , natural resource economics , emissions trading , developing country , greenhouse gas , environmental economics , economics , economic growth , computer science , ecology , database , philosophy , epistemology , composite number , biology , algorithm
This paper discusses the role of the Clean Development Mechanism (CDM) in the market for carbon quotas and countries' commitments to reduce their carbon emission levels. We show that the CDM contributes to an efficient funding of clean technology investments in least developed countries. However, the CDM is not neutral on the global level of carbon emissions as it entices countries to raise their emission caps. The CDM may also make inappropriate the inclusion of any country that takes no emission abatement commitment. It can even make inefficient a country's decision to commit to an emission target. The implications of the presence of non‐additional projects are also analyzed.