 Transaction costs of the Kyoto MechanismsAxel Michaelowa, Marcus Stronzik, Frauke Eckermann and Alistair Hunt Climate Policy, 2003, vol. 3, issue 3, 261-278 Abstract: Transaction costs will reduce the attractiveness of the Kyoto Mechanisms compared to domestic abatement options. Especially the project-based mechanisms Clean Development Mechanism (CDM) and Joint Implementation (JI) are likely to entail considerable costs of baseline development, verification and certification. The Activities Implemented Jointly (AIJ) pilot phase and the Prototype Carbon Fund (PCF) programme give indications about the level of these costs. Under current estimates of world market prices for greenhouse gas emission permits, projects with annual emission reductions of less than 50,000 t CO 2 equivalent are unlikely to be viable; for micro projects transaction costs can reach several hundred € per t CO 2 equivalent. Thus, the Marrakech Accord rule to have special rules for small scale CDM projects makes sense, even if the thresholds chosen advantage certain project types; projects below 1000 t CO 2 equivalent per year should get further exemptions. An alternative solution with no risk for the environmental credibility of the projects would be to subsidise baseline setting and charge lower, subsidised fees for small projects for the different steps of the CDM/second track JI project cycle. Date: 2003 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:tcpoxx:v:3:y:2003:i:3:p:261-278 Ordering information: This journal article can be ordered from Access Statistics for this article Climate Policy is currently edited by Professor Michael Grubb More articles in Climate Policy from Taylor & Francis Journals |
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