Analysis of Carbon Credits' Transactions: An Empirical Study
Posted: 27 Aug 2007
Date Written: June 2006
The Kyoto Protocol was approved in February 2005 and the carbon market without rules, played by pioneer companies interested in learning how to do with their corporate image, started working towards a formality. As Certified Emissions Reduction (CER) market has already established Institutional Environment, it is interesting to study, based on the Transaction Cost Economics (TCE) theory, how the transaction costs induce alternative ways of production, in particular the contracts between private companies, with CDM (Clean Development Mechanism) projects, and the commercialization channels developed by multilateral organizations. For this, the research uses the case studies method to obtain private information about the transactions of CER, and their contracts between Brazilian companies and a multilateral organization, the World Bank. A result is that, in contrast with the spot market relationship, the Brazilian CDM projects benefited - in terms of reduction of transaction costs - with the CERs transactions (contracts) involving the World Bank since this bank does all distribution channel functions except the acquisition of CERs property rights.
Keywords: Kyoto Protocol, Clean Development Mechanism, Transaction Costs Economics, Distribution Channels
JEL Classification: D23, L22, M21, Q25, Q40
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