In the Kyoto protocol, there are flexible market mechanisms allowing
countries to abate efficiently in theory. In practice, these projects are only
marginally, at best, contributing to a net reduction in emissions. Some argue
that the Clean Development Mechanism (CDM), that allow developed countries to
support development projects in developing countries. The project is supposed
to replace a project that uses energy inefficiently or contribute to global
warming with a project that makes use of modern clean technology. This can
happen on a small or larger scale. Following the negotiations right now about
the Clean Development Mechanism many countries raise their concerns about the lack
of demand for projects. Prices have plummeted because there is an over-supply
of projects. This is a direct cause of the low mitigation targets proposed for
the current commitment period. Countries such as Venezuela are now urging an
augmentation of mitigation targets to ensure that the CDM can function. New
Zealand, that is not signing the second commitment period of the Kyoto Protocol
that is being negotiated in Doha, proposes that they should also be able to
access the projects. The Bingos, the business community represented within the
negotiations, call for reforms of the CDM to ensure its continuity. As I see
it, the main problem that will prevent the effective functioning of the CDM is
low mitigation commitments during a second Kyoto period will sustain low demand
and low prices. When the cost of a project is higher than the return (possible profit
generated and payment from a develop country) there is no economic incentive to
undertake the project. A possible solution is to let non-parties to the
Protocol access the mechanism. This could potentially boost demand. On the
other hand, such countries have no legally binding mitigation targets and are
therefore unlikely to make much use of the CDM. More updates on this soon!
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8 år sedan
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