IS CDM CLEAN

1
IS CDM CLEAN?

• by Johannes Bollen
• MNP

based on 1 Caps and Fences, Trade-offs in
shaping Kyoto 2 Thesis A Trade view on Climate
Change Policies A Multi-Region Multi-Sector
Approach
Publications can be found at www.mnp.nl Email
jc.bollen_at_mnp.nl
2
CDM in post-Kyoto will

• lower costs in non-global coalitions
• Compliance costs to abters will almost be halved
• Donor countries will gain
• increase leakage
• Intended emission reductions in hosting countries
  can evaporate up to 40
• because of
• expansion of non-restricted activities
• local energy markets
• but can be lowered through appropriate policy
  design

3
CDM modelling

• IET price CDM price carbon tax in hosting
  countries
• ERUs based on partial analysis
• without recycling (CDM price) revenues and CDM
  finances
• Actual emissions based on
• Carbon tax revenues recycled lump-sum to
  consumers
• CDM finances used to subsidize lowering the
  production costs

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5
CDM will lower the costs in non-global
coalitions, but
Macro-economic costs (NI)
Trade price 54 / t CO2
Trade price 131 / t CO2
6
CDM leads to strong leakages, but lowered through
appropriate policy design

50
40
30
CDM Leakage rate
20
10
0
0
25
50
75
100
125
150
Trade price in / t CO2
7
Leakages are relatively small considering the
impacts on the global emission reductions
2.0
Annex I
Global
2
0
Celsius EU objective
2
0
Celsius EU objective
EU -25
1.5
Annex I CDM
Global Macro-economic costs in 2020 (NI)
1.0
0.5
0.0
0.0
0.2
0.6
0.8
0.4
Global Emission Reduction (
Tg
CO2)
8
Thank for your attention!!