Why the CDM, While Promising, is a Long Way from Being a ‘First-Best’ Market Mechanism

windIn economics, pollution is looked at as negative externality which induces cost into a system for almost everyone. Fortunately, a host of measures are being devised to address pollution on communal, national and international levels. The Clean Development Mechanism (CDM) is one such measure, but has quite a few problems associated with it, which shall be the concern of this post. I will outline the mechanism, elaborate on its function and  then consider Hepburn’s problem of CER markets.

The CDM (full version – pdf)

Advertisements

Leave a comment below if you like.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s