By Albert Eagle
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Additional resources for A practical treatise on Fourier's theorem and harmonic analysis for physicists and engineers
No economic modelling or equilibrium analysis has been used in deriving the scenarios. Thus, the only way in which we make the demand influence our supply estimations is when we assume some policy-related restrictions to the acceptability of CDM projects. 1) where: CERsubm 5 CER volume by 2020 listed in PDDs of projects submitted up to 2008. CERinfl,y 5 CER volume by 2020 listed in PDDs of projects to be submitted in each year between 2008 and 2012. pvalid 5 probability of validation of projects submitted until 2012.
1. These five perverse incentives are described in the following paragraphs. A first way in which the CDM generates disincentives for action is the ‘paradox of participation’ described by Gupta et al. 409), which relies on effects of the balance between supply and demand for carbon credits: the more CDM projects are developed and generate credits, the lower will be the price for such credits, given a fixed demand for carbon credits (which is determined by the emission reduction targets of Annex I countries and their domestic policies to reduce emissions).
When, in June 2007, the CDM EB agreed on rules for PoAs, it was hoped that they would significantly reduce transaction costs and mobilize the diffusion of small technologies, where the exact number and location of projects would not be known ex ante. However, for over two years, PoAs did not really move forward. The main reasons were regulatory barriers, such as the liability of the project validator for any part of the PoA that might be found faulty even years after its registration, the limitation to one baseline methodology and the debundling rules for application of small- scale methodologies.