Corporate motives and strategies of both investing and hosting country affect the outcomes of a clean development mechanism (CDM) project - Who introduces what technology to whom - And result in large differences in economic viability and the CO2 emission reductions. This is particularly true for steel industry in which steel making consists of many detailed and complex processes, a given strategy could produce cumulative effects of the individual technologies used, leading to large energy savings overall. The objective of this study is to demonstrate some analytical methods that can be used to quantitatively evaluate the impacts of technology selection on the profit performance of CDM projects. Specifically, in this study we analyze a CDM project to introduce energy saving technology from Japan to a small steel manufacturer in China's Shandong Province, and conduct a simulation of the quantitative relationships between various technology options and profitability. Based on these results, we examine the environmental and economic significance of technology selection for CDM projects. To take this further, we then reconsider the profitability of a project as typical FDI activity (i.e., without the CDM), and by comparing this outcome with the CDM case, we clarify the significance and potential of the CDM.
Bibliographical noteFunding Information:
We, authors appreciate that Dr. Hoesung Lee of Council on Energy and Environment Korea (CEEK) made valuable comments. However, all the remaining errors are ours. The research was funded in part by a Grant-in-Aid for Scientific Research (B) from the Japanese Ministry of Education, Culture, Sports, Science and Technology (MEXT), No.14350285.
All Science Journal Classification (ASJC) codes
- Management, Monitoring, Policy and Law