Small and Beautiful? The Programme of Activities and the Least Developed Countries∗

Most carbon abatement projects under the Kyoto Protocol’s Clean Development Mechanism (CDM) have been implemented in rapidly industrializing countries, notably China and India. To support small carbon abatement projects and to promote decarbonization in the least developed countries, the Programme of Activities (PoA) modality was introduced. But are the determinants of project implementation different under the PoA from those for conventional CDM projects? To answer this question, we conduct a statistical analysis of the global distribution of CDM projects and PoAs during the years 2007-2012. In regard to country size, large countries clearly dominate both the CDM and PoA, suggesting that the PoA may do only little to facilitate project implementation in small countries. However, the number of PoAs has a strong negative association with the proportion of a country’s corruption level, while the importance of corruption for the CDM is much smaller. Moreover, per capita income has no effect on PoA implementation, while high wealth levels have a weak positive effect on CDM projects. Thus, the PoA modality seems to promote sustainable development in poor countries that have exceeded a certain threshold of good governance. In this regard, PoAs are directing carbon credits to new areas, as many had initially hoped. ∗We thank Narayan Subramanian and Patrick Woolsey for insightful comments on a previous draft. †Corresponding author. University of Mannheim, School of Social Sciences, Department of Political Science. D7, 27, 68131 Mannheim, Germany. Email: [email protected]. Phone: +49-161-181-2418.