Macroeconomic Impacts of the Clean Development Mechanism: The Role of Investment Barriers and Regulations

Arbeitspapier

This paper quantifies the macroeconomic impacts of the Clean Development Mechanism (CDM) under the Kyoto Protocol based on a computable general equilibrium (CGE) model of international trade and energy use. Employing project-based CDM supply data we assess the relative importance of transaction costs and investment risks as well as CDM regulations through supplementarity and additionality criteria. Our numerical results show that the macroeconomic impacts of transaction costs and investment risks are negligible: Given the large supply of cheap project-based emissions credits in developing countries, compliance to the Kyoto Protocol can be achieved at a very low cost. However, regulatory restrictions such as a supplementarity criterion can substantially curtail the potential efficiency gains from where-flexibility in climate policy.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ZEW Discussion Papers ; No. 07-026

Classification and Topics

• Classification: Wirtschaft ; Computable General Equilibrium Models ; Environmental Economics: Government Policy ; Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth ; Allocative Efficiency; Cost-Benefit Analysis
• Subject: Kyoto Protocol ; Emissions Trading ; Clean Development Mechanism ; Computable General Equilibrium

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Anger, Niels ; Böhringer, Christoph ; Moslener, Ulf
• Event: Veröffentlichung
• (who): Zentrum für Europäische Wirtschaftsforschung (ZEW)
• (where): Mannheim
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/24586
• Last update: 10.03.2025, 11:42 AM CET