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The clean development mechanism (CDM) could play an important role in the power generation sector of developing countries and emerging economies by providing additional revenue to support the diffusion of renewable energy sources (RES). This paper investigates the contribution of the CDM to deployment of renewable electricity projects in China and India, and highlights the main potentialities and limitations of this mechanism for their support. The outcome of our analysis shows many differences and similarities in the way and scale of CDM projects for renewable electricity generation have been implemented in the two countries. In both cases, the CDM has made a contribution to greening investments in the power generation sector, which is still largely dominated by subcritical coal-fuelled power plants. Nonetheless, some major problems still remain and they are mainly related to the distribution of projects across different technologies and to the environmental integrity of the mechanism. In view of the likely revision of the CDM in the post-Kyoto period, we find that the differentiation of the credit generation rate of different project categories could bring some level of improvement without significantly altering the current system functionality. [ABSTRACT FROM AUTHOR]

The Clean Development Mechanism (CDM) emerged under the Kyoto Protocol to facilitate collaboration between developed and developing countries in order to mitigate greenhouse gases. The CDM allows developed countries to receive credits towards meeting their obligatory targets by investing in emission reduction projects in developing countries. The countries are required to set up a Designated National Authority (DNA) to approve the CDM projects. This paper examines the role of the DNA in ensuring sustainable development, using the empirical case of China and India. Three aspects of the DNA's role are examined: the institutional structure, the policy context and the CDM project market. All three aspects highlight the important role of the DNA in meeting the countries' sustainable development priorities. [ABSTRACT FROM AUTHOR]

China is the second largest emitter of greenhouse gases (GHG) in the world, with potentially about two thirds of total Certified Emission Reductions (CERs) for Asia on the world carbon market (Gruetter, 2002). Since 68% of its primary energy is from coal, China's average energy intensity is 7.5 times higher than the EU and 4.3 times higher than the US (EU, 2003). Therefore, introducing advanced clean technologies and management to China represents opportunities for Annex I countries to obtain low-cost CERs through CDM projects, and access to one of the largest potential energy conservation markets in the world. CDM can provide a win-win solution for both China and Annex I countries, and the Chinese government considers that the introduction of CDM projects can bring advanced energy technologies and foreign investment to China, thereby helping China's sustainable economy and generating CERs. As energy efficiency is generally low and carbon intensity is high in both China's energy supply and demand sectors, numerous options exist for cost-effective energy conservation and GHG mitigation with CDM. This paper reviews current Chinese policies and administrative and institutional settings for CDM cooperation, and discusses existing policy, institutional and other barriers in the energy market by drawing on observations and experience from previous initiatives such as Cleaner Production and energy efficiency. Some options to remove these barriers are addressed. In order to make CDM projects feasible, China's government needs to promote awareness, streamline administrative systems, and be more active in building a competitive edge in the world carbon market. [ABSTRACT FROM AUTHOR]

Wood pellets are regarded as one of the substitutes for fossil fuels like coal and oil for heating and co-generation. Wood pellets are a successful example of market penetration of renewable energy in some countries in Europe, e.g., Sweden. An analysis process is proposed in this paper and used to conduct a techno-economic assessment of wood pellets production and applications in some areas in China with the consideration of technology transfer from Sweden by examining their market competitiveness with coal in these areas. Financial indices such as net present value (NPV), internal return rate (IRR) and year-to-positive cash flow are calculated to investigate the profitability of the technology transfer. Four locations of applications in China have been considered as case studies. The result indicates that in the market-only-based scenario, wood pellets production will not be profitable in all selected areas. New scenarios from the analysis process show that reducing investment and increasing the amount of bank loan will be helpful to increase the project's profitability in general; adding taxes on coal could be effective, but it depends on Chinese government's future efforts on climate change mitigation; carbon credits on wood pellets through the clean development mechanism (CDM) might make wood pellet projects profitable giving wood pellets a nich-market. The potential global environment benefits of CO2 emission reduction by using wood pellets to replace coal in a 7 MWth coal-fired industrial boiler with a thermal efficiency of 80% and 5000 hours of operation time are also presented. [ABSTRACT FROM AUTHOR]

The clean development mechanism (CDM) has been widely considered a win-win scenario from which both developed and developing countries could benefit. However, in spite of its growing popularity and the increasing number of issued certified emission reductions, CDM has not been effective in reducing greenhouse gas emissions and helping developing countries to achieve sustainable development. By considering the case of China, it appears that, although there are fundamental weaknesses in the institutional design of CDM, it is the host country's domestic conditions that have the biggest impact on CDM's effectiveness. The Chinese government has implemented its own rules and regulations, and addressed the problems in CDM processes in ways that maximise its national interest, whilst preventing non-governmental actors from participating in the policy process. The combination of governmental intervention and weak non-governmental participation has shaped the outcomes of CDM projects in China. The balance between these two domestic factors may be critical in influencing the effectiveness of CDM governance. [ABSTRACT FROM AUTHOR]