Technology development and project based mechanisms in international climate change policy

Abstract: In the earlier paper, we analyzed a possibility of CDM domino, where CDM (Clean Development Mechanism) is a flexibility mechanism adopted in the Kyoto protocol (KP) for the international scheme to prevent climate change due to emission of green house gases (GHG), and domino means adoption of one CDM project induces other CDM projects. In this paper, we attempt to analyze the opposite effect of project based mechanisms including CDM, i.e. the negative impact of adoption of one project upon other potential projects. This possibility has an important implication on the technological development for the prevention of climate change, as the early adoption of a technology receives an unduly special position so that newly developed technology has relatively fewer chances of a success. Even though people disagree over many issues, there seem to be widespread agreement that technological breakthrough is a key element for the long run success of international climate policy. Thus the evaluation of the effect of mechanisms on the technology development to overcome current reliance on carbon intensive technology is important, especially in the ongoing negotiation toward new schemes to be instituted for the period following the period covered by (KP). There are several factors contributing this possible preemption property of project-based mechanisms, in the design of these mechanisms. Especially important is the baseline setting methods, so that credits fro