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Climate change mitigation in advanced developing countries: empirical analysis of the low-hanging fruit issue in the current CDM


Castro Pareja, Paula Monica (2010). Climate change mitigation in advanced developing countries: empirical analysis of the low-hanging fruit issue in the current CDM. CIS Working Paper 54, University of Zurich.

Abstract

Under the Kyoto Protocol, developing countries can voluntarily participate in climate change mitigation through the Clean Development Mechanism (CDM), where emission reduction credits from projects in developing countries are bought by industrialized countries to meet their own commitments. Before its implementation, developing-country experts opposed the CDM, arguing that it would sell off their countries’ cheapest emission reduction options and force them to invest in more expensive measures to meet their future reduction targets. This paper analyzes this “low-hanging fruit” argument empirically. CDM projects’ emissions abatement costs and potentials are estimated for different technologies in eight countries, using capital budgeting tools and the information from the projects’ documentation. Through a comparison with theoretical marginal abatement cost curves, we discuss whether the low-hanging fruit argument holds. We find that the CDM is not yet capturing a large portion of the identified abatement potential in most countries. While the costs of most emissions reduction opportunities grasped lie below the average credit price, there is still plenty of low-cost opportunities available. Mexico and Argentina appear to use the CDM exclusively for harvesting the low-hanging fruit, whereas in the other countries analyzed more expensive projects are also accessing the CDM. This evidence challenges the low-hanging fruit claim.

Abstract

Under the Kyoto Protocol, developing countries can voluntarily participate in climate change mitigation through the Clean Development Mechanism (CDM), where emission reduction credits from projects in developing countries are bought by industrialized countries to meet their own commitments. Before its implementation, developing-country experts opposed the CDM, arguing that it would sell off their countries’ cheapest emission reduction options and force them to invest in more expensive measures to meet their future reduction targets. This paper analyzes this “low-hanging fruit” argument empirically. CDM projects’ emissions abatement costs and potentials are estimated for different technologies in eight countries, using capital budgeting tools and the information from the projects’ documentation. Through a comparison with theoretical marginal abatement cost curves, we discuss whether the low-hanging fruit argument holds. We find that the CDM is not yet capturing a large portion of the identified abatement potential in most countries. While the costs of most emissions reduction opportunities grasped lie below the average credit price, there is still plenty of low-cost opportunities available. Mexico and Argentina appear to use the CDM exclusively for harvesting the low-hanging fruit, whereas in the other countries analyzed more expensive projects are also accessing the CDM. This evidence challenges the low-hanging fruit claim.

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Additional indexing

Item Type:Working Paper
Communities & Collections:06 Faculty of Arts > Institute of Political Science
Dewey Decimal Classification:320 Political science
Uncontrolled Keywords:climate change, Kyoto Protocol, clean development mechanism (CDM), abatement costs, low-hanging fruit problem
Language:English
Date:March 2010
Deposited On:19 Feb 2019 13:22
Last Modified:07 Apr 2020 07:19
Series Name:CIS Working Paper
Number of Pages:33
ISSN:1662-7504
OA Status:Green
Free access at:Official URL. An embargo period may apply.
Official URL:https://www.ethz.ch/content/dam/ethz/special-interest/gess/cis/cis-dam/Research/Working_Papers/WP_2010/2010_WP54_Castro.pdf
Related URLs:http://www.cis.ethz.ch/research/working-papers.html (Organisation)
https://www.recherche-portal.ch/primo-explore/fulldisplay?docid=ebi01_prod009517348&context=L&vid=ZAD&search_scope=default_scope&tab=default_tab&lang=de_DE (Library Catalogue)

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