Co-Benefits and Additionality of the Clean Development Mechanism: An Empirical Analysis

41 Pages Posted: 5 Jan 2010 Last revised: 26 Apr 2014

See all articles by Junjie Zhang

Junjie Zhang

Duke Kunshan University; Duke University

Can Wang

Tsinghua University - School of Environment

Date Written: November 28, 2010

Abstract

The Clean Development Mechanism (CDM) allows industrialized countries to comply with the Kyoto Protocol by using carbon offsets from developing countries. There are two puzzles within this carbon market: additionality (the proposed activity would not have occurred in its absence) and co-benefits (the project has other environmental benefits besides climate mitigation). This paper proposes an econometric approach to evaluate the CDM effect on sulfur dioxide emission reductions and assess its additionality indirectly. Our empirical model is applied to China's emissions at the prefecture level. We found that the CDM does not have a statistically significant effect in lowering sulfur dioxide emissions. This result casts doubt on additionality of these CDM activities, that is, they would have happened anyway.

Keywords: Clean Development Mechanism, co-benefits, additionality, semiparametric panel data model

JEL Classification: Q54, C23, C14

Suggested Citation

Zhang, Junjie and Wang, Can, Co-Benefits and Additionality of the Clean Development Mechanism: An Empirical Analysis (November 28, 2010). Journal of Environmental Economics and Management, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1530848 or http://dx.doi.org/10.2139/ssrn.1530848

Junjie Zhang (Contact Author)

Duke Kunshan University ( email )

No. 8 Duke Avenue
Kunshan, 215316
China
+86 512 36657068 (Phone)

HOME PAGE: http://junjiezhang.org

Duke University ( email )

No. 8 Duke Avenue
Kunshan, 215316
China
+86 512 36657068 (Phone)

HOME PAGE: http://junjiezhang.org

Can Wang

Tsinghua University - School of Environment ( email )

China

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