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Title CDM and FDI Inflows in Sub-Saharan Africa: : Comparative Study of South Africa and Rwanda
Journal name Asian Journal of Climate Change and Sustainable Development: Law, Economics and Politics
Author Myung Shin Ko
Co_author -
Section Journal
Number Vol.1 No. 1
Date 2012.04
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Abstract 

The Clean Development Mechanism (CDM) is the only Kyoto Protocol instrument that enables both developed and developing countries cooperate to response to climate change.  The CDM is criticized due to its disproportionate regional market distribution. Sub-Saharan Africa (SSA) lags behind compared to other developing countries in CDM activities.  However, even though South Africa is one of the countries in SSA region, its CDM activities and performance are more active than other African countries.  This study aims to explore factors influencing the direction of CDM investment flows with compare analysis of two countries in Sub-Saharan Africa: South Africa and Rwanda.  In general, South Africa, the continent’s “Front Runner” as far as CDM is concerned in SSA, has 1) favorable business environment that attract potential CDM investors; 2) large-scale projects based on coal-based economy, which generate large quantities of CERs than small-scale projects; and 3) officially established and well-staffed local institution as well as CDM communication channels.  On the contrary, Rwanda is 1) less attractive to FDI investors; 2) heavily dependent on agriculture sector which leads to have small-scale projects; and 3) lack of well-functioning institution.

 

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