Do bilateral commercial relationships influence the distribution of CDM projects?

Valeria Costantini and Giorgia Sforna

No 176, Departmental Working Papers of Economics - University 'Roma Tre' from Department of Economics - University Roma Tre

Abstract: This paper contributes to the issue of the uneven distribution of Clean Development Mechanism (CDM) projects among developing countries. By applying a gravity model to a panel dataset at bilateral country level, we find that well-established export flows from developed economies towards developing countries explain a large portion of the geographical distribution of CDM projects. The policy implication we derive is that a sort of lock-in effect in the CDM relationship should be avoided by enhancing the institutional framework in developing countries hosting CDMs as well as by reinforcing compulsory rules for CDM destination toward the least developed economies. On the contrary, if market forces are left free to influence CDM destination, cost effectiveness in abatement efforts is not the driving force influencing the decision on destination market, but other criteria based on private benefits seem to prevail.

Keywords: Kyoto Protocol; Clean Development Mechanism, Export Flows; Gravity Model; Institutional Quality (search for similar items in EconPapers)
JEL-codes: F14 F18 Q54 Q56 (search for similar items in EconPapers)
Pages: 36
Date: 2013-06
New Economics Papers: this item is included in nep-ene, nep-env, nep-int and nep-ppm
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Persistent link: https://EconPapers.repec.org/RePEc:rtr:wpaper:0176

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