Böhringer, ChristophRutherford, Thomas F.Springmann, Marco2014-02-052014-02-052013-12https://hdl.handle.net/10986/16936The Clean Development Mechanism established under the Kyoto Protocol allows industrialized Annex I countries to offset part of their domestic emissions by investing in emissions-reduction projects in developing non-Annex I countries. Computable general equilibrium analysis of the Clean Development Mechanism's impacts so far mimics the Clean Development Mechanism as a sector emissions trading scheme, thereby overstating its potential to save climate change mitigation costs. This study develops a novel approach that represents the Clean Development Mechanism more realistically by compensating Clean Development Mechanism implementing sectors for additional abatement cost and by endogenizing Clean Development Mechanism credits as a function of investment. Compared with previous representations, the proposed approach is more consistent in its incentive structure and investment characteristics at the sector level. An empirical application of the new methodology demonstrates that the economy-wide cost savings from the Clean Development Mechanism tend to be lower than suggested by conventional modeling approaches while Clean Development Mechanism implementing sectors do not lose in output.en-USCC BY 3.0 IGOABATEMENTABATEMENT COSTSABATEMENT OPTIONSAPPROACHARBITRAGEAVAILABILITYBALANCEBENCHMARKBENCHMARK DATABILATERAL TRADECARBONCARBON ABATEMENTCARBON CONTENTCARBON FINANCECARBON LEAKAGECARBON MARKETCARBON PRICECERTIFIED EMISSION REDUCTIONSCHANGES IN PRICESCHEMICAL PRODUCTSCLIMATECLIMATE CHANGECLIMATE CHANGE MITIGATIONCLIMATE POLICIESCLIMATE POLICYCO2COALCONSUMERSCOST FUNCTIONSCOST OF PRODUCTIONCOSTS OF COMPLIANCECOSTS OF EMISSIONSCRUDE OILDEVELOPMENT POLICYDISTRIBUTIONAL IMPACTSDOMESTIC EMISSIONSECONOMIC ANALYSISECONOMIC EQUILIBRIUMECONOMIC GROWTHECONOMIC IMPACTECONOMIC IMPACTSECONOMIC PERSPECTIVEECONOMIC RESEARCHECONOMICS OF CLIMATE CHANGEECONOMY-WIDE IMPACTSELASTICITY OF SUBSTITUTIONELECTRICITYELECTRICITY PRICESELECTRICITY SECTOREMISSIONEMISSION ABATEMENTEMISSION CONSTRAINTEMISSION CONSTRAINTSEMISSION LEVELEMISSION LIMITATIONEMISSION PERMITSEMISSION REDUCTIONEMISSION REDUCTIONSEMISSION TAXEMISSION TAX RATEEMISSION TAXESEMISSIONSEMISSIONS ALLOWANCESEMISSIONS FROM FOSSIL-FUEL COMBUSTIONEMISSIONS PREDICTIONEMISSIONS QUOTASEMISSIONS REDUCTIONEMISSIONS REDUCTIONSENERGY DEMANDENERGY ECONOMICSENERGY GOODSENERGY INFORMATION ADMINISTRATIONENERGY POLICYENERGY PRODUCTIONENERGY RESEARCHENERGY SUPPLYENERGY SYSTEMENERGY USEENVIRONMENTAL ECONOMICSEQUILIBRIUMEXPORTSFERROUS METALSFINANCIAL SUPPORTFOSSILFOSSIL FUELSFRAMEWORK CONVENTION ON CLIMATE CHANGEFUELFUEL PRICESFUEL SUPPLYFUNCTIONAL FORMSFUTURE RESEARCHGENERAL EQUILIBRIUM ANALYSISGHGGLOBAL CARBON MARKETGLOBAL EMISSIONSGREENHOUSEGREENHOUSE GASGREENHOUSE GAS EMISSIONSGREENHOUSE GAS EMISSIONS REDUCTIONSINCOMEINTERNATIONAL ENERGY OUTLOOKINTERNATIONAL OFFSETINTERNATIONAL TRADEINVESTMENT DECISIONSIRONLEVEL OF EMISSIONSMARGINAL ABATEMENTMARGINAL ABATEMENT COSTMONETARY BENEFITSMONETARY FUNDNATURAL GASNATURAL RESOURCESPEPIPELINEPOLICY ANALYSISPOLICY SCENARIOSPRICE ELASTICITYPRICE INCREASESPRICE INDEXPRICE LEVELSPRICES OF ENERGYPRIMARY ENERGYPRODUCTION COSTSPRODUCTION OF ENERGYQUANTITATIVE ANALYSISREBATESREFINED OILRENEWABLE ENERGYRESOURCE ECONOMICSRETURNS TO SCALESENSITIVITY SCENARIOSSHADOW PRICESTRUCTURAL CHANGESUBSTITUTIONTRADE DEFICITTRADING PARTNERSTRANSACTION COSTSUNEPWELFARE LOSSESWORLD CRUDEclimate financeWorld Bank10.1596/1813-9450-6720