A macroeconomic assessment of the Clean Development Mechanism (CDM) in Peru: A CGE analysis

Jean-Marc Montaud (1) , Nicolas Pecastaing (1)

1 CATT - Centre d'Analyse Théorique et de Traitement des données économiques

The Clean Development Mechanism (CDM) under the Kyoto Protocol constitutes a major tool in the fight against climate change; it also is an important foreign direct investment funding opportunity for southern countries. Yet few studies have focused on the economic impact of CDM on host countries. This study attempts such an assessment in Peru, using a computable general equilibrium model that accounts for both the productive and regional dualism of the national economy. The numerical simulation of macroeconomic shocks generated by current and future CDM investments reveals the significant potential impact of such projects in terms of employment, growth, and regional imbalance in this developing country.

Keywords: Development; Dualism; Clean development mechanism; Computable Equilibrium; Peru

Domains: Economics and Finance

Jean-Marc Montaud, Nicolas Pecastaing. A macroeconomic assessment of the Clean Development Mechanism (CDM) in Peru: A CGE analysis. 2013. ⟨hal-01880341⟩