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The incidence and extent of the CDM across developing countries

Published online by Cambridge University Press:  22 January 2016

Shaikh M. Rahman ,
Ariel Dinar  and
Donald F. Larson
Shaikh M. Rahman
Affiliation:
Agricultural and Applied Economics, Texas Tech University, Box 42132, Lubbock 79409, TX, USA. E-mail: shaikh.m.rahman@ttu.edu
Ariel Dinar
Affiliation:
School of Public Policy, University of California, Riverside, CA, USA. E-mail: adinar@ucr.edu
Donald F. Larson
Affiliation:
Development Research Group, The World Bank, Washington, DC, USA. E-mail: dlarson@worldbank.org
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Abstract

This paper empirically examines the factors that determine the incidence and extent of the Clean Development Mechanism (CDM) in developing countries. Estimation results show that the incidence and extent of the CDM is greater for the developing countries with larger mitigation potential and greater capacity to manage the projects. Developing countries with faster economic growth and past experience with activities implemented jointly (AIJ) projects are more likely to host renewable energy projects, although this is not the case for other project types. The incidence and extent of foreign investment projects in energy efficiency, CO2 reduction and non-CO2 gas reduction projects are higher for the countries with lower per capita GDP, most likely due to capital constraints. There is no evidence that the number of sub-regional projects impinged on investment flows. Countries in Sub-Saharan Africa appear to face special obstacles under the CDM even after the strength of institutions and energy-related mitigation opportunities are accounted for.

Type
Research Article
Information
Environment and Development Economics , Volume 21 , Issue 4 , August 2016 , pp. 415 - 438
Copyright
Copyright © Cambridge University Press 2016 

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