ABSTRACT
To minimise and distribute the reduction costs for all Annex B countries, the Kyoto Protocol adopted flexible mechanisms, including establishing the market for tradable emission permits, the Joint Implementation and the Clean Development Mechanism (CDM).There are thus several facets to CDM projects: mitigation of the greenhouse effect, incentives for private investors, and development. These facets can be considered in the light of the three types of rents expected, the sharing of which requires a consensus between the investor and the host country. For industrialised countries the main interest of the CDM is to provide a large potential for emission reductions at a lower cost. The certificates issued in the framework of CDM consequently appear as an additional environmental rent in the analysis of the variants of investment projects. Environmental rent results from the lower CO2 emissions than those in the reference scenario with diesel generators and would be shared between the E7's private partners and the Bolivian government.
