The political economy of the clean development mechanism (CDM) governance system.

Nedergaard, Peter (2011): The political economy of the clean development mechanism (CDM) governance system. Published in:

Abstract

In spite of the exponentially increasing volume of the CDM system of the Kyoto Protocol, very few have so far come up with scholarly political economy analysis of its governance system. Based on interviews with the CDM system’s main stakeholders as well as through scrutiny of CDM related documents, this paper will contribute to filling this hole. In this respect, it is assumed that the political economy analysis can be based on two analytical concepts: First, the CDM governance system has to be legitimate (the political side of the system), i.e. seen as broadly acceptable and accountable by its stakeholders as well as the broader public. Second, the CDM governance system has to be efficient (the economic side of the system), i.e. involve as few transaction costs as possible. Based on these concepts, the paper analyses the present balances of the CDM governance system.

• Item Type: MPRA Paper
• Language: English
• Keywords: CDM, climate policy, legitimacy, efficiency
• Subjects: E - Macroeconomics and Monetary Economics > E0 - General

References

Arrow, K. (1969): “The organisation of economic activity: Issues pertinent to choice of market versus nonmarket allocation”. In: The Analysis and Evaluation of Public Expenditure: The PPB System. Vol. 1. U.S. Joint Economic Committee, 91st Congress, 1st Session. Washington, D.C.: U.S. Governmant Printing Office, pp. 59-73.

Boyd, E; Hultman, N; Roberts, J.T.; Corbera, E.; Cole, J.; Bozmoski, A.; Ebeling, J.; Tippman, R.; Mann, P.; Brown K. and Livenman D.M. (2009): “Reforming the CDM for Sustainable Developmen: Lessons learned and policy futures.” Enviomental Science and Policy, Vol. 12. CDM Statistics 2010: http://cdm.unfccc.int/statistics/index.html

Chadwick; B. (2006): “Transaction costs and the clean development mechanism”. Natural Resources Forum vol. 30, pp. 256-271.

Coase, R. (1960): “The Problem of Social Cost”. Journal of Law and Economics, vol. 3, pp. 1-44.

Cosbey, A.; Parry, J.-E.; Browne, J.; Babu, Y.D.; Bhandari, P.; Drexhage, J.; Murphy, D. (2005). Realizing the Development Dividend: Making the CDM Work for Developing Countries. Report. International Institute for Sustainable Development.

Cottarelli, C. (2005): Efficiency and Legitimacy: Trade-offs in IMF Governance. IMF Working Paper, WP 05/107. Del Rio, Pablo (2007). “Encouraging the implementation of small electricity CDM projects: An economic analysis of different options”. Renewable and Sustainable Energy Reviews, vol. 11, pp. 1361-1387.

Depledge, J. (2005): The Organization of Global Negotiations. Constructing the Climate Change Regime. London: Earthscan. 28

Dornau. J. (2008): Carbon Finance, April 2008. Easton, D. (1965): A Systems Analysis of political Life. John Wiley & Sons.

UNEP Risoe Centre/EcoSecurities (2007): “Guidebook to Financing CDM Projects”. UNEP Risoe Centre. Ellis, J. and Kamel, S. (2007): ”Overcoming Barriers to Clean Development Mechanism”. UNEP. Risø Centre and OECD International Energy Agency.

Furubotn, E. G. and Richter, R. (1997):”Institutions and economic theory: The contribution of the new institutional economics”. Ann Arbor: University of Michigan Press.

Grubb, M; Vorlijk, C. and Brack, D. (1999): The Kyoto Protocal – A Guide and Assessment. The Royal Institute of International Affairs.

Holden, P. (2004):“Government reforms to reduce transaction costs and promote private sector development”. Economic Reform Issue Paper, N° 0406 (22 January). Center for International Private Enterprise, Washington, D.C.

Lee, M (ed.) (2004): “CDM Information and Guidebook”. The UNEP project CD4CDM. UNEP

Lesolle, D. (2008). “Legal Influence Perspectives from Africa on a Reformed CDM”. In: Olsen, K.; Fenhann (eds.): A Reformed CDM – Including New Mechanisms for Sustainable Development. UNEP Risoe Centre.

Legeut, B. and Elabed, G. (2008): “A reformed CDM to increase supply: Room for action”. In: Olsen, K.; Fenhann (eds.): A Reformed CDM – Including New Mechanisms for Sustainable Development. UNEP Risoe Centre. 29

Liverman, D. and Boyd, E. (2008): “Improving Price Equity in CDM Projects: Strategies for Maximizing Carbon Value – The CDM, ethics and development.” In: Olsen, K.; Fenhann (eds.): A Reformed CDM – Including New Mechanisms for Sustainable Development. UNEP Risoe Centre.

Maosheng, D. (2008): “The Clean Development Mechanism. Assessment of Experience and Expectations for the Future.” In: Olsen, K.; Fenhann (eds.): A Reformed CDM – Including New Mechanisms for Sustainable Development. UNEP Risoe Centre.

Matsuo, N. (2003): CDM in the Kyoto Negotiations: How CDM Has Worked as a Bridge Between Developed and Developing Worlds?” Kluwer Academis Publishers.

Michaelowa, A. and Jotzo, F. (2005): “Transaction costs, institutional rigidities and the size of the clean development mechanism”. Energy Policy, pp. 511-523.

Murphy, D.; Cosbey, A. and Drexhage, J. (2008): “Market Mechanism for Sustainable Development in a post-2012 Climate regime.” In: Olsen, K.; Fenhann (eds.): A Reformed CDM – Including New Mechanisms for Sustainable Development. UNEP Risoe Centre.

North, D. C. and Thomas, R. P. (1973): “The Rise of the Western World: A New Economic History”. Cambridge: Cambridge University Press.

Olsen, K.; Fenhann (eds.) (2008): A Reformed CDM – Including New Mechanisms for Sustainable Development. UNEP Risoe Centre.

Page, S. (2002): Developing Countries in GATT/WTO Negotiotions. Overseas Development Institue. Working Paper. Stern Review Report (2006): The Economics of Climate Change http://www.hm- treasury.gov.uk/independent_reviews/stern_review_economics_climate_change/stern_review_repor t.cfm 30

Sugiyama, T.; Yamacuchi, K.; Yamagata, H. (2005). CDM in the Post Kyoto Regime: Incentive mechanisms for developing countries to promote energy conservation and renewable energies. Worhshop Issue paper, 22.-23. March 2005. UNFCCC (2010). Project Design Document Form /CDM-PDD/ http:// cdm.unfccc.int

Williamson, O. (1985): “The Economic Institutions of Capitalism: Firms, Markets, Relational Contracting”. New York: The Free Press.

World Bank (1991): “Managing Development – The Governance Dimension”. Washington D.C. OECD principles of good governance.