The clean development mechanism in a global carbon market

Thierry Bréchet, Yann Ménière () and Pierre Picard

No 2012040, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: This paper discusses the role of the Clean Development Mechanism (CDM) on the market for carbon quotas and countries' commitments to reduce their carbon emission levels. We show that the CDM contributes to an efficient funding of clean technology investments in least developed countries. However, the CDM is not neutral on the global level of carbon emissions as it entices countries to raise their emission caps. The CDM may also make inappropriate the inclusion of any country that takes no emission abatement commitment. It can even make inefficient a country's decision to commit to an emission target.

Keywords: clean development mechanism; climate policy; strategic interactions (search for similar items in EconPapers)
JEL-codes: F64 Q5 R11 (search for similar items in EconPapers)
Date: 2012-10-11
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Citations: View citations in EconPapers (4)

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Related works:
Working Paper: The Clean Development Mechanism in a Global Carbon Market (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2012040

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