Reporting Bias and Monitoring in Clean Development Mechanism Projects

The Clean Development Mechanism (CDM) is a flexible carbon market mechanism managed by the United Nations. The program grants tradable carbon emissions credits (Certified Emission Reductions) for carbon‐reducing projects in developing countries. A project can only be admitted to program if it is not financially profitable, and thus would not take place, without the emission credits granted through the CDM. In this paper, we examine how monitoring reduces incentives of companies to bias the reported expected financial viability of potential CDM projects to gain admission to the program. We find that reported rates of return, which are a key factor for admission to the program, tend to be downwardly biased and are negatively associated with the expected benefits stemming from forecasted greenhouse gas reductions. However, monitoring from various sources mitigates some of the distorted incentives and related reporting bias. Furthermore, the monitoring effect becomes much stronger after 2008, when the CDM Executive Board implemented a series of measures to strengthen the additionality testing which provides guidance for program applications

The implementation of emissions trading in companies

This paper investigates what activities large companies have undertaken to utilize emissions trading and/or offset projects as part of a strategy for climate change. The main objective is to explore how the political conditions in home countries have affected corporate activity towards emissions trading. Based on an analysis of data of 218 companies derived from a questionnaire, this is examined by assessing to what extent emissions trading is becoming embedded in large companies. Looking at the pattern of actions of a cross-section of companies from different countries and industries, an evaluation is made of the path that companies take to move towards the implementation of emissions trading. Findings show that many companies have the intention to participate in the emission market, but are postponing implementation until government policy becomes more concrete

Building Blocks for Volume-Oriented Changeability in Personnel Cost Structure of Manufacturing Companies

Part 1: Knowledge-Based Performance ImprovementInternational audienceVolatilities in global markets lead to rising importance of volume-oriented changeability (VoC) in the manufacturing industry. If the production demand is fluctuating, manufacturing companies often struggle to adapt their overhead costs, which are causing high variances in unit costs. Personnel is a main cost driver in overhead cost structure, in particular in high-wage countries. Therefore, this paper conceptualizes building blocks and analyzes impact relations for configuring VoC in personnel cost structure in production plants