Concept of Regional CDM Approval Body – Bundling Designated National Authorities: Case of West African Economic and Monetary Union – A Public Choice Analysis

Honorat Satoguina

No 352, HWWA Discussion Papers from Hamburg Institute of International Economics (HWWA)

Abstract: In the Marrakech Accords, the international community established a complex set of rules for the CDM, including a project cycle, indicating certain important responsibilities for the host developing countries such as the approval of CDM projects. Hence, countries have to establish their approval body, which is the Designated National Authority (DNA). In addition, most of the studies and discussions on the DNA structures in Latin America and Caribbean and Indonesia have revealed the DNAs' inability to be financially supported by the developing host countries However, the Marrakech Accords did not specify that the DNA must not be created at national level. Hence, to reduce transaction costs to DNAs, it could be possible to create a regional CDM approval body. The current study suggested this concept between the West African Economic and Monetary Union (WAEMU) countries' which are just in the process of establishing their DNAs. In addition, based on the new political economy, DNA stakeholders' behaviour has been analysed. The study concluded that the regional approval body is economically defensible and represents the social optimum which maximises social welfare. Moreover, until now all the discussions on the DNA have been carried out at the national level. It has never been an attempt to discuss the CDM institution building at the regional level. Hence, this study is an attempt to fill the gap. Based on the results, this study proposes innovatively to establish a joint Approval Body among countries with limited CDM potential.

Keywords: Designated National Authority; architectural design; CDM institution building; regional CDM approval body; transaction costs; economies of scales (search for similar items in EconPapers)
JEL-codes: F5 F53 Q01 Q28 Q56 (search for similar items in EconPapers)
Date: 2006
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