An analysis of Chinese perceptions on unilateral Clean Development Mechanism (uCDM) projects

Unilateral Clean Development Mechanism (uCDM) projects are planned, implemented and financed by a Non-Annex I entity yet without the direct involvement of an Annex I entity. Currently in the CDM project pipeline, unilateral projects grow continuously. On the basis of a questionnaire survey and formal and informal discussions with key CDM stakeholders in China, which dominate the world CDM market, this study tested seven propositions: (1) uCDM provision provides lower risk to the host country investor; (2) uCDM provision lowers transaction costs; (3) uCDM provision helps to keep rent in the host country; (4) uCDM provision offers less technology transfer than normal CDM projects; (5) delayed financial flow in uCDM projects will be a major problem for developing uCDM projects; (6) the Chinese Government will promote uCDM policy in the future; and (7) there will be more uCDM projects in China in the future. The first six hypotheses were accepted while the final one was rejected. Outcomes of this study may help refine future uCDM policy.