Microsoft Word - 2010-10-09 Adipic acid paperFinal.docx

This research paper evaluates the impact of the Clean Development Mechanism (CDM) and Joint Implementation (JI) on nitrous oxide (N2O) abatement in the adipic acid sector. While the carbon market successfully incentivized abatement levels of 98% to 100%, which exceed previous technical benchmarks, the authors find that the CDM created significant economic incentives that led to carbon leakage. Specifically, production shifted from non-CDM plants to CDM plants during the 2008-2009 economic downturn, resulting in an estimated 13.5 MtCO2e of issued credits that did not represent real emission reductions.

• The carbon market successfully incentivized N2O abatement levels that exceeded previous technical literature and benchmarks. While the IPCC and European Commission identified best available technology efficiencies between 82% and 96%, CDM and JI projects achieved elimination of 98% to 100% of N2O emissions.
• The CDM created a massive competitive advantage for participating plants because the profits from selling Certified Emission Reductions (CERs) could exceed the actual production costs of adipic acid. This allows CDM plants to operate at negative or very low costs (EUR -350 to EUR +500), whereas non-CDM producers face significantly higher costs.
• The economic incentives of the CDM led to carbon leakage during the 2008 and 2009 economic downturn. Production shifted from non-CDM plants—including those in the US and Singapore that already abated N2O—to CDM plants, meaning the resulting CERs did not represent real emission reductions.
• The authors estimate that approximately 20% of CERs issued to adipic acid CDM plants for 2008 and 2009 (totaling about 13.5 MtCO2e) did not represent real emission reductions. Specifically, they estimate an increase in global GHG emissions of 6.3 MtCO2e in 2008 and 7.2 MtCO2e in 2009 due to production shifts.
• Unlike the CDM, Joint Implementation (JI) projects did not appear to cause significant production shifts or carbon leakage. This is attributed to the fact that JI projects use a baseline of approximately 90% abatement, resulting in significantly lower revenues from Emission Reduction Units (ERUs) compared to the CDM.
• To prevent future carbon leakage, the authors recommend replacing the current CDM methodology with an ambitious baseline emission benchmark. They suggest a benchmark in the range of 9 to 50 kg N2O per ton of adipic acid, which would reduce the oversized profit margins that trigger production shifts.

APA

Stockholm Environment Institute (n.d.). Microsoft Word - 2010-10-09 Adipic acid paperFinal.docx. https://www.sei.org/mediamanager/documents/Publications/Climate/sei-adipicacidleakage-9oct2010.pdf

Chicago

Stockholm Environment Institute. Microsoft Word - 2010-10-09 Adipic acid paperFinal.docx. n.d. https://www.sei.org/mediamanager/documents/Publications/Climate/sei-adipicacidleakage-9oct2010.pdf.

Wikipedia

{{cite report |author=Stockholm Environment Institute |title=Microsoft Word - 2010-10-09 Adipic acid paperFinal.docx |url=https://www.sei.org/mediamanager/documents/Publications/Climate/sei-adipicacidleakage-9oct2010.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{stockholmenvironmentinstitutendmicrosoft, author = {{Stockholm Environment Institute}}, title = {{Microsoft Word - 2010-10-09 Adipic acid paperFinal.docx}}, institution = {Stockholm Environment Institute}, url = {https://www.sei.org/mediamanager/documents/Publications/Climate/sei-adipicacidleakage-9oct2010.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }