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dc.contributor.authorRaubenheimer, Stefanen_US
dc.contributor.authorMichaelowa, Axelen_US
dc.contributor.authorJahn, Michaelen_US
dc.contributor.authorLiptow, Holgeren_US
dc.description.abstractThe Clean Development Mechanism (CDM) was originally seen as an instrument with a bilateral characterwhere an entity from an industrialised country invests in a project in a developing country (DC). Also,multilateral funds were envisaged that would bundle investments to spread project risks. The sluggish implementationof incentives for industrialised country companies to embark on CDM projects and low carbonprices led to a preference of just buying Certified Emission Reductions (CERs) instead of investing inprojects. Thus a third option has gained prominence – the unilateral option where the project developmentis planned and financed within the DC. We propose that a project should be called ?pure unilateral? if itinvolves no foreign direct investment (FDI), only has the approval of the Designated National Authority(DNA) of the host country and sells its CERs after certification directly to an industrialised country. Unilateralprojects can become attractive if the host country risk premium for foreign investors is high despitea high human, institutional and infrastructure capacity and domestic capital availability. Moreover, transactioncosts can be reduced compared to foreign investments that have to overcome bureaucratic hurdles.On the other hand, technology transfer is likely to be lower, capacity building has to be done by the hostcountry and all risks have to be carried by host country entities.The potential to carry out unilateral CDM projects strongly varies among DCs. Whereas several countriesfrom Asia and Latin America might well be able to design projects autonomously, most of the Sub-Saharan countries rely on foreign support. International donors of capacity building grants should increasinglyaddress those DCs that are not in the focus of foreign investors and support them in the designof projects.en_US
dc.publisher|aHamburg Institute of International Economics (HWWA) |cHamburgen_US
dc.relation.ispartofseries|aHWWA Discussion Paper |x263en_US
dc.subject.keywordClean Development Mechanismen_US
dc.subject.keywordproject participantsen_US
dc.subject.keywordrisk premiumen_US
dc.subject.stwClean Development Mechanismen_US
dc.titleMeasuring the Potential of Unilateral CDM : A Pilot Studyen_US
dc.typeWorking Paperen_US

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