Project Mechanisms and Technology Di usion

Niveau: Secondaire, CAP
Project Mechanisms and Technology Di?usion in Climate Policy March 15, 2010 Abstract The paper deals with the di?usion of GHG mitigation technologies in developing countries. We develop a model where an abatement technology is progressively adopted by ?rms and we use it to compare the Clean Development Mechanism (CDM) with a standard Cap and Trade scheme (C&T). In the presence of learning spillovers, we show that the CDM yields a higher social welfare than C&T if the ?rst adopter receives CDM credits whereas the followers do not. The analysis leads us to suggest two CDM design improvements: re- laxing the additionality constraint for projects which generate signi?cant learning externalities, and allowing collective CDM projects which could internalize learning externalities. Keywords : climate policy, technology di?usion, Kyoto Protocol, Clean Development Mechanism, emissions trading JEL code: H87, O33, Q55, Q54 1

• can also


• adoption


• countries


• allowing industrialized countries


• cdm


• learning spillovers


• climate treaties


• collective cdm


• receives credits


• technology di?usion