Abstract
To mitigate climate change, states must make significant investments into energy and other sectors. To solve this problem, scholars emphasize the importance of leveraging private capital. If states create institutional mechanisms that promote private investment, they can reduce the fiscal cost of carbon abatement. We examine the ability of different international institutional designs to leverage private capital in the context of the Kyoto Protocol's Clean Development Mechanism (CDM). Empirically, we analyze private capital investment in 3749 climate mitigation projects under the CDM, 2003-2011. Since the CDM allows both bilateral and unilateral implementation, we can compare the two modes of contracting within one context. Our model analyzes equilibrium private investment in climate mitigation. When the cost of mitigation is high, unilateral project implementation in one host country, without foreign collaboration, draws more investment than bilateral contracting, whereby foreign investors participate in the project.
| Language | English |
|---|---|
| Pages | 14-24 |
| Number of pages | 11 |
| Journal | Ecological Economics |
| Volume | 96 |
| DOIs | |
| Publication status | Published - 1 Dec 2013 |
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Keywords
- clean development mechanism
- climate mitigation
- private investment
- unilateral versus bilateral project implementation
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Leveraging private capital for climate mitigation : evidence from the clean development mechanism. / Bayer, Patrick; Marcoux, Christopher; Urpelainen, Johannes.
In: Ecological Economics, Vol. 96, 01.12.2013, p. 14-24.Research output: Contribution to journal › Article
TY - JOUR
T1 - Leveraging private capital for climate mitigation
T2 - Ecological Economics
AU - Bayer, Patrick
AU - Marcoux, Christopher
AU - Urpelainen, Johannes
PY - 2013/12/1
Y1 - 2013/12/1
N2 - To mitigate climate change, states must make significant investments into energy and other sectors. To solve this problem, scholars emphasize the importance of leveraging private capital. If states create institutional mechanisms that promote private investment, they can reduce the fiscal cost of carbon abatement. We examine the ability of different international institutional designs to leverage private capital in the context of the Kyoto Protocol's Clean Development Mechanism (CDM). Empirically, we analyze private capital investment in 3749 climate mitigation projects under the CDM, 2003-2011. Since the CDM allows both bilateral and unilateral implementation, we can compare the two modes of contracting within one context. Our model analyzes equilibrium private investment in climate mitigation. When the cost of mitigation is high, unilateral project implementation in one host country, without foreign collaboration, draws more investment than bilateral contracting, whereby foreign investors participate in the project.
AB - To mitigate climate change, states must make significant investments into energy and other sectors. To solve this problem, scholars emphasize the importance of leveraging private capital. If states create institutional mechanisms that promote private investment, they can reduce the fiscal cost of carbon abatement. We examine the ability of different international institutional designs to leverage private capital in the context of the Kyoto Protocol's Clean Development Mechanism (CDM). Empirically, we analyze private capital investment in 3749 climate mitigation projects under the CDM, 2003-2011. Since the CDM allows both bilateral and unilateral implementation, we can compare the two modes of contracting within one context. Our model analyzes equilibrium private investment in climate mitigation. When the cost of mitigation is high, unilateral project implementation in one host country, without foreign collaboration, draws more investment than bilateral contracting, whereby foreign investors participate in the project.
KW - clean development mechanism
KW - climate mitigation
KW - private investment
KW - unilateral versus bilateral project implementation
UR - http://www.scopus.com/inward/record.url?scp=84885203304&partnerID=8YFLogxK
U2 - 10.1016/j.ecolecon.2013.09.008
DO - 10.1016/j.ecolecon.2013.09.008
M3 - Article
VL - 96
SP - 14
EP - 24
JO - Ecological Economics
JF - Ecological Economics
SN - 0921-8009
ER -