Post-Doctoral_MDP Latin America

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Centre for theoretical analysis and treatment of economic data (CATT)
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Can the Clean Development Mechanism (CDM) fulfil both its environmental and development objectives? Post-doctoral research on the case of Latin America

Team:

  • Jean-Marc MONTAUD (Project Manager)
  • Nicolas PECASTAING

Project:

The Kyoto protocol began in 2005. The objective is to reduce worldwide greenhouse gas emissions (GHG) by 5.2% compared with 1990. The next conference on climate change and on the future of the protocol was held a[CA1] t the end of 2011 in South Africa.

To reduce the GHG and lower the cost of reducing corporate emissions, different “flexibility” mechanisms have been mooted:

- Purchase emission permits on the carbon market (price of a ton of carbon = approximately USD 13).

- Develop projects in Southern countries to obtain “carbon” credits in exchange (Clean Development Mechanism, CDM).

The aim of the Clean Development Mechanism is to foster investments in developing countries to encourage the transfer of environmentally-friendly technologies and thereby promote sustainable development.

The CDM apply to several types of projects in renewable energies, improving energy efficiency or in the forestry sector. Regulation authorities “make sure” that emissions are effectively reduced, which requires an extensive administrative setup. Reductions in emissions like this will therefore be allocated to investors.

This mechanism integrates developing countries into the global drive to fight against the greenhouse effect, in preparation for total integration after 2012[AW2] . Thanks to the CDM, Annex 1 countries can invest beyond their borders, at the lowest possible cost, by receiving “certified emission reduction units” (CERU).

In January 2011, 2,700 projects had already been recorded (2,100 project in Asia, 500 in Latin America and the Caribbean and just 50 in Africa). South America has a high potential for reduction in the energy (hydraulic or biomass sectors) and the forestry domains (Amazonian area).

In spite of the rapid growth of this new market CDM projects still raise many questions that this research project sets out to analyze:

Do CDM provide an effective environmental response?

  • Environmental effectiveness is often questioned (Project “additionality” / environmental neutrality): is there actually a real reduction in GHG?
  • Complex emissions management
  • Price of carbon (theoretical and methodological limits to monetary evaluation)

Do CDM provide an effective response to the issue of development?

  • Low level of technology transfer required for the development of DC.
  • Risk of the “Public Aid to Development” being siphoned off to the CDM.
  • Geographical imbalance of CDM (few projects on certain continents).

Silent partner:

 Pau Béarn Pyrénées Conurbation

Duration:

12 months.