Industrial N2O Projects Under the CDM: Adipic Acid - A Case of Carbon Leakage?
SEI Working Paper WP-US-1006Author(s): Schneider, L. ; Lazarus, M. ; Kollmuss, A.
This paper evaluates projects under the Clean Development Mechanism (CDM) that abate N2O emissions from adipic acid production. The research shows that carbon markets enabled N2O emissions abatement levels that had not previously been achieved. However, the analysis shows that the CDM appears to have caused significant carbon leakage during the economic downturn in 2008 and 2009. We estimate that about 20% of the CERs issued for CDM adipic acid plants for 2008 and 2009 - totaling to about 13.5 MtCO2e - do not represent real emission reductions. The paper also evaluates policy solutions to prevent carbon leakage in the future.
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