WOULD PREFERENTIAL ACCESS TO THE EU ETS BE SUFFICIENT TO OVERCOME CURRENT BARRIERS TO CDM PROJECTS IN LDCs?

The research paper examines the marginal role of Least Developed Countries (LDCs) in the Clean Development Mechanism (CDM) and evaluates whether preferential access to the EU ETS can increase their participation. It finds that such access is insufficient unless underlying barriers—including limited institutional capacity, lack of financing, and high transaction costs—are addressed. The authors use supply-demand scenarios for 2013-2020 and a comparison with the Lomé Conventions in agricultural trade to argue that financial incentives for high-value projects and reduced access costs are more critical than market access alone.

• LDCs are severely underrepresented in the CDM; as of January 2009, they hosted only 41 projects in the pipeline (0.94% of the total), with only 10 registered, and are expected to generate approximately 1% of all Certified Emission Reductions (CERs) projected until 2012.
• The EU climate and energy package for 2013-2020 provides limited preferential access for LDCs and Small Island Developing States (SIDSs), including a specific demand for approximately 80 million credits, but the authors conclude this is insufficient to boost CDM development if implementation barriers remain.
• Major barriers to CDM implementation in LDCs include limited institutional and technical capacity, lack of domestic financing, unattractive investment climates for foreign investors, and the small scale of potential projects which increases transaction costs and risks.
• Quantitative projections for 2013-2020 suggest that CER supply will likely not meet global demand under most scenarios, and LDCs will remain unimportant in the market even with preferential access policies.
• A comparison with the Lomé Conventions in agricultural trade indicates that preferential market access fails if it does not address underlying causes of lack of competitiveness and if access costs remain high.
• The case of Honduras demonstrates that local entrepreneurship and leadership, combined with external aid for institutional setup, can lead to CDM success even in small, poor countries with unstable political regimes.

APA

Castro, P., & Michaelowa, A. (2009). WOULD PREFERENTIAL ACCESS TO THE EU ETS BE SUFFICIENT TO OVERCOME CURRENT BARRIERS TO CDM PROJECTS IN LDCs? Climate Strategies. https://climatestrategies.org/wp-content/uploads/2014/11/preferential-access-and-cdm-in-ldcs.pdf

Chicago

Castro, Paula, and Axel Michaelowa. WOULD PREFERENTIAL ACCESS TO THE EU ETS BE SUFFICIENT TO OVERCOME CURRENT BARRIERS TO CDM PROJECTS IN LDCs? Climate Strategies, 2009. https://climatestrategies.org/wp-content/uploads/2014/11/preferential-access-and-cdm-in-ldcs.pdf.

Wikipedia

{{cite report |last1=Castro |first1=Paula |last2=Michaelowa |first2=Axel |title=WOULD PREFERENTIAL ACCESS TO THE EU ETS BE SUFFICIENT TO OVERCOME CURRENT BARRIERS TO CDM PROJECTS IN LDCs? |publisher=Climate Strategies |date=30 March 2009 |url=https://climatestrategies.org/wp-content/uploads/2014/11/preferential-access-and-cdm-in-ldcs.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{castro2009would, author = {Castro, Paula and Michaelowa, Axel}, title = {{WOULD PREFERENTIAL ACCESS TO THE EU ETS BE SUFFICIENT TO OVERCOME CURRENT BARRIERS TO CDM PROJECTS IN LDCs?}}, institution = {Climate Strategies}, year = {2009}, month = mar, url = {https://climatestrategies.org/wp-content/uploads/2014/11/preferential-access-and-cdm-in-ldcs.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }