Renewable energy investment and the clean development mechanism

Kirill Zavodov

Energy Policy, 2012, vol. 40, issue C, 81-89

Abstract: This paper uses transaction and index data to empirically examine price formation in, and equilibrium characteristics of, the primary CDM market. Results point to the preemptive (and, possibly, speculative) behaviour among intermediaries (carbon firms), and inefficiencies in information transmission between secondary and primary markets. Since the primary carbon market is unstable and is prone to rational and irrational oscillations, the CDM, in its current form, is not a reliable policy tool for long-term renewable energy sector development plans, whenever fiscal regulatory instruments are available.

Keywords: Clean development mechanism; Real options; Renewable energy investment (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:40:y:2012:i:c:p:81-89

DOI: 10.1016/j.enpol.2010.06.065

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