Africa and the Clean Development Mechanism: What Determines Project Investments?

Dirk Röttgers and Ulrike Grote

World Development, 2014, vol. 62, issue C, 201-212

Abstract: African countries have hardly used the opportunity to implement CDM projects and thereby turn environmental problems into business and development opportunities. This paper finds out why by identifying factors of CDM partnerships. Our gravity model analyzes flows of Certified Emission Reductions (CERs) between host and financier countries. Findings show that foreign direct investments, official development assistance, and trade have a positive influence on project attraction. A distinction between project initiation and CER flow size shows that the specific shortcomings of African countries lie with the initial attraction of investors. This points to an inadequacy in the initial process of project generation.

Keywords: Clean Development Mechanism; Africa; foreign direct investment; official development assistance; gravity model; Heckman (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:62:y:2014:i:c:p:201-212

DOI: 10.1016/j.worlddev.2014.05.009

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