On the Use of Clean Development Mechanism Credits for Compliance in the EU Emissions Trading Scheme

This article critically examines the role played by Clean Development Mechanism projects for compliance into the EU Emissions Trading Scheme. We highlight risk factors specific to each emissions market - additionality and predictability for CERs, grandfathering, compliance events and banking provisions for EUAs -, as well as common risk factors - the ITL-CITL connection, the role played by the 1.7Gton import limit, and uncertainties concerning future international agreements on climate change.