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Net climate change mitigation of the Clean Development Mechanism

Energy Policy, in press, online 22 May 2014

Author(s): Erickson, P. ; Lazarus, M. ; Spalding-Fecher, R.
Year: 2014

This article gauges the net emissions impact of the CDM, providing two scenarios based on different assumptions about the additionality of large-scale power projects. It also identifies options to increase the CDM's mitigation benefits.

The Clean Development Mechanism (CDM) has allowed industrialized countries to buy credits from developing countries for the purpose of meeting targets under the Kyoto Protocol. In principle, the CDM simply shifts the location of emission reductions, with no net mitigation impact.

Departing from this zero-sum calculus, the Cancun Agreements reached at the sixteenth session of the Conference of the Parties (COP) in 2010 called for "one or more market-based mechanisms" capable of "ensuring a net decrease and/or avoidance of global greenhouse gas emissions", an intention reiterated at COP17 and COP18. This article explores the extent to which the CDM may or may not already lead to such a "net decrease".

The authors find that the CDM's net mitigation impact likely hinges on the additionality of large-scale power projects, which are expected to generate the majority of CDM credits going forward. If these projects are truly additional and continue to operate well beyond the credit issuance period, they will decrease global greenhouse gas emissions. However, if they are mostly non-additional, as research suggests, they could increase global greenhouse gas emissions. The article closes with a discussion of possible means to increase mitigation benefit.

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