Resource title

Macroeconomic Impacts of the Clean Development Mechanism: The Role of Investment Barriers and Regulations

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Resource description

This paper quantifies the macroeconomic impacts of the Clean Development Mechanism (CDM) under the Kyoto Protocol based on a computable general equilibrium (CGE) model of international trade and energy use. Employing project-based CDM supply data we assess the relative importance of transaction costs and investment risks as well as CDM regulations through supplementarity and additionality criteria. Our numerical results show that the macroeconomic impacts of transaction costs and investment risks are negligible: Given the large supply of cheap project-based emissions credits in developing countries, compliance to the Kyoto Protocol can be achieved at a very low cost. However, regulatory restrictions such as a supplementarity criterion can substantially curtail the potential efficiency gains from where-flexibility in climate policy.

Resource author

Niels Anger, Christoph Böhringer, Ulf Moslener

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Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/24586

Resource license

Adapt according to the presented license agreement and reference the original author.