Environmental Economics

This paper aims to study the co-benefits of clean development mechanism (CDM) projects, and further to discuss the policy of its implications. It has been found that many energy-related climate change mitigation (CCM) activities, including CDM projects, are able to produce a significant amount of co-benefits, while the policy implications have been limited. Through co-benefits assessment of Chinese CDM projects, it can be concluded that: (1) there are uncertainties relating to co-benefits assessment; (2) co-benefits assessment can be only applied to energy related projects (ERPs) and not to HFC23 decomposition projects; (3) hydropower and wind power projects are the largest contributors to cobenefits. Considering average capacity, projects concerning energy switch from coal to natural gas, coal mine methane recovery and biogas recovery are also important; and (4) the distribution of co-benefits in China are uneven. Through a discussion about policy implications of co-benefits, this paper suggest that co-benefits should neither be involved into current international CCM negotiation, nor used to ensure projects’ contribution to sustainable development. However, co-benefits analysis can indicate synergies or optimised trade-offs between CCM and protecting local environment, which is valuable for decision-making in developing countries, especially for local governments.