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Technology transfers in the Clean Development Mechanism: an incentives issue

Published online by Cambridge University Press:  16 July 2002

Katrin Millock
Katrin Millock
Affiliation:
Centre International de Recherche sur l'Environnement et le Développement (CIRED), CNRS-EHESS, 45 bis, avenue de la Belle Gabrielle, 94 736 Nogent sur Marne Cedex, France. Tel: (+33) 01.43.94.73.73. Fax: (+33) 01.43.94.73.70. Email: Millock@centre-cired.fr
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Abstract

The Clean Development Mechanism (CDM) offers abatement cost savings under the Kyoto Protocol by allowing credits for emission reductions obtained in signatory developing countries. The paper argues that technology transfers can improve incentives for cost-effective emission reductions under bilateral CDM contracts when there is asymmetric information between the investor and the host party.

JEL classification: Q20; D82

Keywords

Global climate changeAsymmetric informationThe Clean Development MechanismOptimal incentivesTechnology transfers
Type
Theory and Applications
Information
Environment and Development Economics , Volume 7 , Issue 3 , July 2002 , pp. 449 - 466
Copyright
© 2002 Cambridge University Press

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Footnotes

Thanks are due to the organisers and participants of the Second International Conference on Environment and Development at the Royal Swedish Academy of Sciences 6–8 September 2000, especially Bernardo Mueller for his detailed discussion of the paper. I also thank Catherine Hagem, Jean-Charles Hourcade, three anonymous reviewers, and participants at a presentation at the American Agricultural Economics Association (AAEA) Annual Meeting in Tampa, July 2000, for helpful comments. Any errors are the sole responsibility of the author.