Why has China not embraced a global cap-and-trade regime?

Although many economic studies suggest that China would reap significant benefits from participating in a global cap-and-trade regime, China has consistently refused to participate in international negotiations on this issue. Understanding China's underlying concerns is a key to explaining why China has not embraced an international greenhouse gas emissions trading scheme. This is explored as a potential basis for including China in future negotiations and schemes. This issue is considered from the following perspectives that impact upon China: (a) fairness: how do developing countries perceive emissions caps? (b) why have China and India been sceptical about international emissions trading? (c) what would China's political perceptions be of an inflow of CDM investment in comparison with the exports of emissions permits to the USA? (d) what are the implications of ‘lock in’ to an emissions cap, particularly when no rules and principles exist for setting emissions targets for post-2012? (e) the complex question of establishing future emissions caps for developing countries.     

The political economy of carbon markets: The CDM and other stories

Despite ongoing faith in their ability to deliver meaningful reductions in GHG emissions as the Durban climate summit approaches in December 2011 and as the end of the first commitment period of the Kyoto Protocol in 2012 looms large, carbon markets have been adversely affected by low prices that are failing to drive necessary investment in low-carbon technology and a series of scandals about their integrity. Some Clean Development Mechanism (CDM) projects have nevertheless delivered reductions in GHG emissions and sustainable development benefits. However, these benefits are too few, and strong incentives still remain in place to go for ‘low-hanging fruit’ opportunities that bring few additional environmental and developmental gains. Although governance reforms have a part to play in addressing these issues, these are not teething problems that can be easily weeded out with further institutional learning and innovation. They touch on the deeper politics of carbon markets and the role politics play in responses to climate change that have to be addressed.     

Assessing the additionality of CDM projects: practical experiences and lessons learned

The Clean Development Mechanism (CDM) under the Kyoto Protocol allows industrialized countries to use credits from greenhouse gas (GHG) abatement projects in developing countries. A key requirement of the CDM is that the emission reductions be real, measurable and additional. This article evaluates how the additionality of CDM projects has been assessed in practice. The analysis is mainly based on a systematic evaluation of 93 registered CDM projects and comes to the conclusion that the current tools for demonstrating additionality are in need of substantial improvement. In particular, the application of the barrier analysis is highly subjective and difficult to validate in an objective and transparent manner. Key assumptions regarding additionality are often not substantiated with credible, documented evidence. In a considerable number of cases it is questionable whether the emission reductions are actually additional. Based on these findings, practical recommendations for improving the assessment of additionality are provided.     

Corporate responses to the CDM: the Indian pulp and paper industry

The key outcomes of the 2006 Nairobi Conference on Climate Change are described, with a particular emphasis on adaptation, the Clean Development Mechanism (CDM) and the future of the United Nations climate change regime beyond 2012. Based on an analysis of the key issues being negotiated, the Nairobi Conference can be understood as an important step in the larger process towards a future climate change regime. Its significance is in establishing the confidence and trust between the key players that will be necessary for the successful completion of the current phase of negotiations and agreement on the post-2012 climate change regime.     

Selecting and assessing sustainable CDM projects using multi-criteria methods

Even though sustainable development has been broadly debated, the clean development mechanism (CDM) still lacks sophisticated multi-criteria decision methods for identifying, selecting and assessing CDM project activities from this perspective. Bearing in mind the huge number of CDM projects that are beginning to accumulate as the carbon market gains momentum, and the importance for non-Annex I Parties to keep focused on the sustainability objective, this article aims at developing a tool for prioritizing—within a given group, and once a specific list of sustainable development criteria is agreed upon and given—proposed CDM projects from this sustainable development point of view. We reached the following conclusions: (1) it is important to make a conscious choice of an appropriate way to normalize the sustainability performance data of CDM projects; (2) it is important to make a conscious choice of how to aggregate across multiple attributes; (3) in contrast with conventional multi-criteria assessments, which elicit preferences from a stakeholder panel, preference optimization infers from CDM projects' performance data an optimal set of weights that proponents would choose in order to win a competitive selection process. Such preference optimization methods (a) yield sensible results, simulating a range of decision circumstances, (b) avoid conflict and convey impartiality in situations where competing project proponents are likely to clash over objectionable weightings, (c) avoid cognitive overload when the number of CDM projects and/or indicators is overwhelmingly large, and (d) circumvent time-consuming and costly interviews and surveys.

From a policy perspective, the multi-criteria assessment described here can be a powerful tool for prioritizing CDM projects (1) when there is a limited amount of grant funding to certain CDM project candidates, and (2) when the decisionmaking process incorporates the CDM objective of promoting sustainable development, in addition to the objective of helping developed countries to meet part of their reduction obligations as specified in Annex I of the Protocol.     

水工工程CDM体的陆上施工

以青岛某水工工程为例,介绍了在海中施工CDM桩护岸的主要施工技术和施工方法。工程采用了CDM桩的海中支架设计,介绍了CDM桩块体机具选择,CDM桩配合比设计及最终CDM块体的成桩咬合布置、水下CDM成桩主要施工技术参数和工艺。为以后类似CDM桩施工提供借签。     

Convergence or divergence?: Status and prospects for US climate strategy

The objective of this paper is to assess recent developments and prospects for future changes in United States (US) climate strategy. In doing so, the paper explores some of the key factors that have shaped strategies and policies to date, distinguishing between factors related to institutional and governance structures, linkages between science and policy, energy technology and the role of interest groups. Against this background, the paper attempts to explore future development paths for US climate policy. More specifically, the paper assesses opportunities for policy changes compared to the preferences of the current administration, and the prospects for future linkages between US and international climate change strategies. In brief, the paper argues that substantial changes are unlikely to take place in the near to medium term, leaving open, however, the possibility of wide-ranging changes in domestic politics or major incidents that could facilitate a shift in the perceived need for near-term action.     

Performance of renewable energy technologies under the CDM

While many different greenhouse gas (GHG) mitigation technologies can be implemented under the Clean Development Mechanism (CDM), renewable energy technologies (RETs), in particular, are often viewed as one of the key solutions for achieving the CDM's goals: host-country sustainable development and cost-efficient emissions reductions. However, the viability of emission reduction projects like RETs is technology- and country-specific. To improve the CDM with respect to the diffusion of RETs, it is crucial to understand the factors that ultimately drive or hinder investments in these technologies. This study develops a methodology based on project-level, regional and global variables that can systematically assess the financial and environmental performance of CDM projects in different country contexts. We quantitatively show how six RETs (PV, wind, hydro, biomass, sewage, landfill) are impacted differently by the CDM and how this impact depends on regional conditions. While sewage and landfill are strongly affected independently of their location; wind, hydro and biomass projects experience small to medium impacts through the carbon price, and strongly depend on regional conditions. PV depends more on regional conditions than on the carbon price but is always unprofitable. Furthermore, we determine the carbon prices necessary to push these six RETs to profitability under various regional conditions. Based on these results, we derive policy recommendations to advance the interplay between international and domestic climate policy to further incentivize GHG emission reductions from RETs.     

Experts talk the future Reflections on the Bonn Seminar of Governmental Experts, 16–17 May 2005: a view from Europe

Abstract

This article provides a first-cut estimate of the potential impacts of the clean development mechanism (CDM) on electricity generation and carbon emissions in the power sector of non-Annex 1 countries. We construct four illustrative CDM regimes that represent a range of approaches under consideration within the climate community. We examine the impact of these CDM regimes on investments in new generation, under illustrative carbon trading prices of US$ 10 and 100/t C. In the cases that are most conducive to CDM activity, roughly 94% of new generation investments remains identical to the without-CDM situation, with only 6% shifting from higher to lower carbon intensity technologies.We estimate that the CDM would bolster renewable energy generation by as little as 15% at US$ 10/t C, or as much as 300% at US$ 100/t C.

A striking finding comes from our examination of the potential magnitude of the “free-rider” problem, i.e. crediting of activities that will occur even in the absence of the CDM. The CDM is intended to be globally carbon-neutral—a project reduces emissions in the host country but generates credits that increase emissions in the investor country. However, to the extent that unwarranted credits are awarded to non-additional projects, the CDM would increase global carbon emissions above the without-CDM emissions level. Under two of the CDM regimes considered, cumulative free-riders credits total 250–600 MtC through the end of the first budget period in 2012. This represents 10–23% of the likely OECD emissions reduction requirement during the first budget period. Since such a magnitude of free-rider credits from non-additional CDM projects could threaten the environmental integrity of the Kyoto protocol, it is imperative that policy makers devise CDM rules that encourage legitimate projects, while effectively screening out non-additional activities.     

Promoting renewable energies under the CDM: combining national quotas in Europe and the CDM

Abstract

In the context of combating climate change, renewable energies are considered to play an important role. As these energies are currently not fully competitive compared with conventional power generation technologies, (minimum) quotas have been proposed as one means of overcoming this problem. However, when implementing any instruments at the national level, one should bear in mind that the efficiency of most types of renewable energies is dependent on the location. Thus, leaving the national perspective and investing abroad may result in improved efficiency. Against this background, the integration of the CDM into the European renewable energy policy is proposed.