Will the Clean Development Mechanism Mobilize Anticipated Levels of Mitigation?

Will the Clean Development Mechanism Mobilize Anticipated Levels of Mitigation?

Under the Kyoto Protocol, developed countries can only tap mitigation opportunities in developing countries by investing in projects under the Clean Development Mechanism. Yet Clean Development Mechanism investments have so far failed to reach many of the high-potential sectors identified by the Intergovernmental Panel on Climate Change. This raises doubts about whether the Clean Development Mechanism can generate an adequate supply of credits from the limited areas where it has proved successful. This paper examines the current trajectory of mitigation projects entering the Clean Development Mechanism pipeline and projects it forward under the assumption that the diffusion of the Clean Development Mechanism will follow a path similar to other innovations. Projections are then compared with pre-Clean Development Mechanism predictions of the mechanism s potential market size to discern whether limits on the types of projects entering the pipeline have limited the expected supply of certified emission reductions. Parameter tests suggest that this is not the case and that currently identified Clean Development Mechanism investments will generate offsets in excess of early model predictions. In particular, under favorable circumstances, the mechanism is on track to deliver an average annual flow of roughly 700 million certified emission reductions by the close of 2012 and nearly to 1,100 million certified emission reductions by 2020.

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Bibliographic Details
Main Authors: Rahman, Shaikh M., Dinar, Ariel, Larson, Donald F.
Language:English
Published: 2010-03-01
Subjects:ABATEMENT, ABATEMENT COST, AFFORESTATION, AIR, APPROACH, ATMOSPHERE, BIOMASS, BIOMASS ENERGY, CAPS, CARBON DIOXIDE, CARBON DIOXIDE EQUIVALENT, CARBON MARKETS, CARBON PRICES, CEMENT, CEMENT PRODUCTION, CERTIFIED EMISSION REDUCTION, CERTIFIED EMISSION REDUCTIONS, CLEAN DEVELOPMENT, CLEAN DEVELOPMENT MECHANISM, CLIMATE, CLIMATE CHANGE, CO2, COAL, DIFFUSION, ECONOMIC GROWTH, ECONOMIC MODELS, ELECTRIC POWER, ELECTRIC POWER GENERATION, ELECTRICITY, EMISSION, EMISSION LEVELS, EMISSION REDUCTION, EMISSION REDUCTION TARGETS, EMISSION REDUCTION UNITS, EMISSION-REDUCTION, EMISSIONS REDUCTIONS, ENERGY SUPPLY, ENVIRONMENTAL BENEFITS, ENVIRONMENTAL INTEGRITY, FORESTRY, FORESTS, FOSSIL, FOSSIL FUEL, FOSSIL FUEL SWITCH, GHG, GREENHOUSE, GREENHOUSE GAS, GREENHOUSE GAS EMISSIONS, GREENHOUSE GASES, HFCS, HOT AIR, HYDROFLUOROCARBONS, INNOVATIONS, INVESTMENT STRATEGIES, IPCC, IRON, LANDFILL, LANDFILL GAS, LEARNING, LOW-CARBON, MEDIA, METHANE, N2O, OFFSET PROJECTS, PFCS, PIPELINE, PIPELINE PROJECTS, POLICY IMPLICATIONS, POLICY MAKERS, POWER GENERATION, PROGRAMS, SCENARIOS, SF6, SUPPLY SIDE, TECHNOLOGY TRANSFER, TONS OF CARBON, TOTAL EMISSION REDUCTIONS, UNCERTAINTIES, UNEP, VERIFICATION PROCESS, WIND,
Online Access:http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100316150946
https://hdl.handle.net/10986/3726
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Summary:Under the Kyoto Protocol, developed countries can only tap mitigation opportunities in developing countries by investing in projects under the Clean Development Mechanism. Yet Clean Development Mechanism investments have so far failed to reach many of the high-potential sectors identified by the Intergovernmental Panel on Climate Change. This raises doubts about whether the Clean Development Mechanism can generate an adequate supply of credits from the limited areas where it has proved successful. This paper examines the current trajectory of mitigation projects entering the Clean Development Mechanism pipeline and projects it forward under the assumption that the diffusion of the Clean Development Mechanism will follow a path similar to other innovations. Projections are then compared with pre-Clean Development Mechanism predictions of the mechanism s potential market size to discern whether limits on the types of projects entering the pipeline have limited the expected supply of certified emission reductions. Parameter tests suggest that this is not the case and that currently identified Clean Development Mechanism investments will generate offsets in excess of early model predictions. In particular, under favorable circumstances, the mechanism is on track to deliver an average annual flow of roughly 700 million certified emission reductions by the close of 2012 and nearly to 1,100 million certified emission reductions by 2020.

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