Selecting a CDM investor in China: A critical analysis

The Kyoto Protocol adopted three flexible market-based mechanisms (Emissions Trading; Joint Implementation; Clean Development Mechanism) to meet emission reduction targets in a cost-effective manner. Of these, the Clean Development Mechanism (CDM) is the only mechanism that links developed and developing countries. China has been a dominant player in CDM markets with >50.86% of the world's 4768 CDM projects. This study surveyed key CDM stakeholders from which the identification and ranking of the 10 most important factors that determine the selection of CDM investors in China. The most important factors were "reputation of company" and "experience in CDM project in China" whilst "personal friendship or relationship" was the least influential. European countries (mainly UK, The Netherlands, Sweden and Germany) are the major investors and have both strong reputations in the CDM arena in addition to having assisted China in capacity development activities for CDM in early 2000. An understanding of these selection factors that potential CDM hosts use in their joint venture decisions should benefit CDM investors. This knowledge should also provide the policy and strategic level framework for future potential CDM hosts in other developing countries. (C) 2012 Elsevier Ltd. All rights reserved.