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Abstract
SUMMARY: The efficiency of the Clean Development
Mechanism (CDM) can be seriously hampered because both investors and hosts
of CDM projects will seek to achieve maximum emission reduction. To avoid
overstatement of emission reduction, it becomes necessary to define the
emission that would have occurred without the project — the “baseline.”
This chapter describes several possible kinds of baselines and the
problems posed by each. Country-wide base-lines offer the possibility of
quantifying indirect effects through aggregation, but this must be
balanced against the uncertainty of the assumptions required in an
aggregate baseline. Sectoral baselines are as problematic as sector
boundaries are arbitrary. Thus, project-specific baselines with sectoral
elements are recommended as a basis for the CDM.
JEL-Classification: Q23, Q25, Q13
Keywords: Clean Development Mechanism |
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