The contribution of the Clean Development Mechanism in the Belgian climate policy

The purpose of this chapter is to evaluate the potential contribution of the Clean Development Mechanism to the Belgian climate policy. For this purpose we develop a partial equilibrium model of the carbon market in which the key features of the CDM inherent in its project-based nature are explicitly considered (transaction costs, accessibility rate…). We discuss the conditions under which the CDM could significantly contribute to the Belgian climate strategy and we show that this contribution should remain rather limited due to low expected carbon prices under the first Kyoto commitment period.