Economics Brown Bag Seminar Series - Leslie Martin and Priyanka Banerjee (The University of Melbourne)

Room 605, Level 6 FBE Building 111 Barry street, Carlton

Map

More Information

Renaud Coulomb and Leslie Martin

renaud.coulomb@unimelb.edu.au; leslie.martin@unimelb.edu.au

Title: Credit Where Credit’s Due? Development Co-Benefits of the CDM in India

Abstract: There is increasing interest in promoting social impact investing that can leverage private capital and expertise for environmental goals. The Clean Development Mechanism (CDM) was launched in 2006 to direct private funds into projects that reduce GHG emissions in poor countries. It is the largest system of carbon offsets in the world. We ask: did it indeed deliver sustainable development co-benefits to communities that hosted projects? We show that, in India, CDM projects followed FDI flows to districts with better public infrastructure. Comparing trends in districts that received CDM projects to similar ones that did not, we show that projects reduced poverty and accelerated the convergence of infant mortality rates. Hosting a project led, on average, to a 3 percentage point reduction in poverty. Renewable energy, energy efficiency, and methane avoidance projects were particularly effective in improving these outcomes. HFC projects were not. The results reflect positively on the sustainable development benefits of carbon offsets in rapidly industrialising countries, and underscore the importance of the recent growth in renewable energy and energy efficiency projects.