Abstract
The objective of this paper is to examine the mitigation of climate change using the Clean Development Mechanism (CDM) from the perspective of developing countries. The effects of the CDM on developing countries’ efforts to reduce greenhouse gases (GHGs) pledged under the Paris Agreement (United Nations Framework Convention on Climate Change [UNFCCC], 21st Conference of the Parties, Paris, France) are investigated. Data analysis reveals that the intensive hosting of CDM projects and the resultant higher marginal abatement costs led to fewer efforts by developing countries to mitigate climate change. A theoretical model from the literature of “low-hanging fruits” is applied to determine if rising prices of the CDM can be expected in the future. The results indicate that the benefits for developing countries must increase so as to keep the CDM attractive for them in an environment where they also have reduction commitments. To further ensure the effectiveness of the CDM under the Paris Agreement, policy should ensure that developing countries actually charge higher prices and, at the same time, contribute adequately to the global goal of GHG reductions. To this end, developing countries should be permitted to demand benefits that lie outside the current scope of the CDM, and non-compliance with their climate targets should also be sanctioned. In addition, fostering sustainable development should become more attractive for developed countries without the CDM, e.g., through sustainability labels, so as to reduce the trade-off for developing countries between the benefits of the CDM and compliance with their commitments to mitigate climate change.
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Notes
DNAs are delegated to confirm whether and how much a CDM project contributes to sustainable development. Therefore, the DNAs in the respective countries have a substantial influence to decide whether and under which conditions a project is realized or not.
This is an acronym for “Land Use, Land-Use Change and Forestry”. In the Kyoto Protocol, this term summarizes measures to reduce GHG emissions in these fields (e.g., reforestation, soil-conserving agriculture, preservation of grassland).
In fact, the number of CDM projects registered in a year has to be set in relation to the GDP in the respective years. Countries could be exposed to large fluctuations in their GDPs over the years and so also to a fluctuating investment capability. To check whether the indicator is robust over the years, the number of projects was also set in relation to the GDP in 2017. This showed that both indicators hardly differ from each other and in their behavior toward other indicators.
Derivatives with respect to time are marked with a dot above the variable.
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Stahlke, T. The impact of the Clean Development Mechanism on developing countries’ commitment to mitigate climate change and its implications for the future. Mitig Adapt Strateg Glob Change 25, 107–125 (2020). https://doi.org/10.1007/s11027-019-09863-8
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DOI: https://doi.org/10.1007/s11027-019-09863-8