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CO2 Spain has published a quantitative analysis of the costs that are stranded from the demise of the CDM. Summary findings include:
- $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.
Download Stranded Costs from the Demise of the CDM.
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