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Purpose - Since the registration of the first clean development mechanism (CDM) project in 2004, the CDM has seen a dynamic expansion: the CDM pipeline currently comprises 6,725 projects generating 2.73 billion certified emission reductions (CERs) up to 2012. These CERs result in a substantial financial flow from Annex I to Non-Annex I countries. But CDM projects also result in investments in low carbon technologies, a substantial share of which is focused on the energy sector. The total installed capacity of all CDM projects amounts to 288,944 MW. However, the CDM is not widely taken up in Africa. This holds true for Africa's share in the CDM project pipeline (2.62 per cent), for Africa's share in CERs generated up to 2012 (3.58 per cent) and for the normalized CERs per capita, per country. Two hypothesizes are commonly discussed: first, the continent features low per capita emissions and low abatement potentials. Second, African countries may be hampered by weak institutional frameworks. This article reviews both hypotheses and presents new empirical data. The paper aims to discuss these issues.
Design/methodology/approach - Investigating the greenhouse gas (GHS) abatement potential of 16 energy-related sectors for 11 selected least developed countries in sub-Saharan Africa shows a total theoretical CDM potential of 128.6 million CERs per year. Analyzing investment indicators confirms that most countries are impeded by below average investment conditions.
Findings - It is concluded that Africa offers a considerable range of substantial abatement potentials. However, the weak institutional framework is limiting the uptake of the CDM in Africa. This is underpinned by an analysis which shows if a CDM sector has high investment cost, Africa will have a low share in the sector. If the sector has low investment needs per CER, Africa's share in the CDM sector will be bigger. Investment needs and Africa's share in the pipeline feature a negative correlation.
Research limitations/implications - Supporting CDM development in Africa should not be constraint to technical assistance. It will be crucial to develop an integrated financing approach, comprising the CDM as a co-financing mechanism, to overcome the institutional challenges.
Originality/value - Until today, there are few empirical studies that use concrete criteria and indicators to show why the CDM is underrepresented in Africa. The work presented here contributes to filling this gap.
Limiting global warming to below 2 °C or even 1.5 °C requires a fundamental transformation of global socio-economic systems. This need for transformation has been taken up by international climate policy. This article synthesizes criteria of transformational change from transition research and climate finance agencies. On this basis, the article conducts a multi-criteria evaluation of the transformative potential of the European Union Emissions Trading Scheme (EU ETS), currently the world's largest market-based climate policy. From this case it can be inferred that emissions trading can "destabilize" incumbent high-emission practices, but its effectiveness in fostering innovation is limited. Furthermore, the analysis shows that details in the arrangements of the scheme such as allocation rules can have a strong detrimental impact on its outcome. If a global carbon market with a uniform price were introduced, this could lead to developing countries "buying in" with large amounts of freely allocated allowances. This, however, has been shown to thwart transformational effects and instead contribute to further carbon lock-in.
The Paris Agreement (PA) emphasizes the intrinsic relationship between climate change and sustainable development (SD) and welcomes the 2030 agenda for the global Sustainable Development Goals (SDGs). Yet, there is a lack of assessment approaches to ensure that climate and development goals are achieved in an integrated fashion and trade-offs avoided. Article 6.4 of the PA introduces a new Sustainable Mitigation Mechanism (SMM) with the dual aim to contribute to the mitigation of greenhouse gas emissions and foster SD. The Kyoto Protocol's Clean Development Mechanism (CDM) has a similar objective and in 2014, the CDM SD tool was launched by the Executive Board of the CDM to highlight the SD benefits of CDM activities. This article analyses the usefulness of the CDM SD tool for stakeholders and compares the SD tool's SD reporting requirements against other flexible mechanisms and multilateral standards to provide recommendations for improvement. A key conclusion is that the Paris Agreement's SMM has a stronger political mandate than the CDM to measure that SD impacts are "real, measurable and long-term". Recommendations for an improved CDM SD tool are a relevant starting point to develop rules, modalities, and procedures for SD assessment in Article 6.4 as well as for other cooperative mitigation approaches.
Africa and in particular African Least Developed Countries have to a large extent been neglected by the Clean Development Mechanism (CDM). This article reviews the mechanism's performance in the region and highlights current developments. The analysis is based on a quantitative breakdown of data provided by the United Nations Environment Programme and Technical University of Denmark (UNEP/DTU) CDM Pipeline and was complemented by interviews with selected investors. The findings indicate that despite the various support measures for underrepresented regions, the overall share of African CDM activities continues to be low. The significant rise in the share of Programmes of Activities of recent years cannot make up for the continuing low numbers of African stand-alone projects. Further, the collapse of the compliance market has proved fatal in terms of timing: ongoing efforts to support the development of a genuine African carbon market were suffocated by the lack of demand for Certified Emission Reductions at a moment when capacity building had started to bear fruit. Consequently, instead of being a mitigation tool with significant scale, the future role of the CDM in Africa might be limited to the voluntary market, while at the same time serving as a tool to foster sustainable development, with mitigation benefits.
Emissions Trading Systems and Carbon Pricing schemes are spreading worldwide. This article looks at Carbon Pricing from the international perspective of the UN climate regime and describes what the Paris Agreement adopted in December 2015 means for international Carbon trading. In order to illustrate this, the authors first look back onto the provisions of the Kyoto Protocol and review its flexible mechanisms, namely International Emissions Trading, the Clean Development Mechanism (CDM) and Joint Implementation (JI). In a second step, the changes that the Paris Agreement (PA) brings about for the Carbon Markets are described. Art. 6 of the PA is analyzed, stressing that Art. 6 introduces a new element into emissions trading: all activities carried out under Art. 6 must lead to a net mitigation effect with respect to GHG reduction, thus abandoning the principle of "offsetting" that was at the heart of the project-based mechanisms of the Kyoto Protocol. The different Carbon trading options foreseen by Art. 6 are examined. Finally, the authors discuss ways forward and argue for early piloting schemes for the new "Paris mechanisms".
The Glasgow climate conference marked a symbolic juncture, lying half-way between the adoption of the UNFCCC in 1992 and the year 2050 in which according to the IPCC special report on the 1.5°C limit net zero CO2 emissions need to be reached, globally, in order to maintain a good chance of achieving the 1.5°C limit. This article undertakes an assessment of what the UNFCCC and in particular the Paris Agreement and its implementation process have actually achieved so far up to and including the results of the Glasgow conference. The article discusses efforts at ambition raising both within and outside the formal diplomatic process, the finalization of the implementation rules of the Paris Agreement, as well as progress on gender responsiveness, climate finance, adaptation and loss and damage. In summary, the Paris Agreement and its implementation can be considered a success as it is having a discernible impact on the behavior of parties as well as on non-party actors. However, significant further efforts will be required to actually achieve the objectives of the Agreement.
2020 was meant to be the year of climate ambition. Then the COVID-19 pandemic struck, the Glasgow conference was postponed to November 2021, and climate policy generally appeared to have been put on the backburner. But towards the end of the year prospects seemed to brighten with a series of zero-emission pledges and the election of Joe Biden as US President. This article analyses what the year of the pandemic achieved in terms of combating climate change. This article first summarizes the virtual events that were organised to substitute for the physical UNFCCC conferences and what progress was or was not made on the outstanding items of the "Paris rulebook", implementation of the Gender Action Plan, and other items. Subsequently, the article surveys the status of NDC updates and to what extent recovery programmes have been used to advance climate action. Finally, the article takes a closer look at the current dynamics among non-Party actors. In summary, while formal negotiations essentially stopped in the year of the pandemic, the conservation did not. However, implementation is still lagging far behind the ambitious targets that have been set. While implementation is mostly the domain of national policy, the international process has a number of options at its disposal to foster climate action.