|CO2 Spain has published a quantitative analysis of the costs that are stranded from the demise of the CDM. Summary findings include:|
Download Stranded Costs from the Demise of the CDM.
- $362 billion has been invested in 6,660 CDM projects – renewable power generation, waste management, energy efficiency, and other technologies - that reduce or avoid greenhouse gas emissions in developing countries.
- Although originally designed as a vehicle to channel finance from developed countries to developing ones, over 90% of this CDM investment has been financed domestically.
- The CDM is in demise, as reflected by its near-zero carbon price, being shunned by the international community in favor of new but not yet defined or implemented mechanisms.
- Using a validated investment dataset of nearly 3,000 CDM projects and guidelines from international accounting standards for asset impairment, stranded costs from the demise of the CDM are calculated to be a colossal $66 billion write-down in asset value - over 40% of owner’s equity on average - mainly for developing country investors.
- Also, between 400 and 800 CDM projects will have insufficient revenues to cover their marginal costs and will shut down, increasing global greenhouse gas emissions.
- Left unchecked, this financial and climate catastrophe will likely create an almost insurmountable barrier for future private investment in climate change mitigation.