Establishing additionality: fraud vulnerabilities in the clean development mechanism

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Title Establishing additionality: fraud vulnerabilities in the clean development mechanism
Author Drew, Jacqueline Mary; Drew, Michael Emmanuel
Journal Name Accounting Research Journal
Year Published 2010
Place of publication United Kingdom
Publisher Emerald
Abstract Purpose: This study explores the Clean Development Mechanism (CDM) which creates carbon credits from emission abatement projects in developing economies. The purpose of this paper is to examine the operation of the CDM with specific reference to fraud vulnerabilities regarding the additionality of a project. An examination of the process of establishment, certification and verification of additionality (confirmation that emissions post-implementation of the CDM project are lower than those that would have occurred under the most plausible alternative scenario) is used to highlight the need for particular vigilance in respect to sustaining and improving the integrity of future market-based mechanisms post-Kyoto. Design/methodology/approach: The study takes a case study approach, examining the CDM project cycle and associated key entities. Findings: The study posits that the processes associated with establishing and verifying additionality of a project are potentially key areas of systemic weakness that must be addressed. This case study explores the design features of the CDM that may afford greater opportunities for fraudulent or deceptive practices. Originality/value: The CDM takes a project-by-project approach to establishment, verification and certification of additionality. Whilst conceptually this design may be appropriate from an operational perspective, it potentially provides opportunities for fraudulent outcomes. The individualised approach is, by its very nature, highly resource-intensive and inherently difficult to verify.
Peer Reviewed Yes
Published Yes
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Copyright Statement Copyright 2010 Emerald. This is the author-manuscript version of this paper. Reproduced in accordance with the copyright policy of the publisher. Please refer to the journal's website for access to the definitive, published version.
Volume 23
Issue Number 3
Page from 243
Page to 253
ISSN 1030-9616
Date Accessioned 2010-11-24
Language en_AU
Research Centre ARC Centre of Excellence in Policing and Security
Faculty Arts, Education and Law
Subject Criminology; Finance
Publication Type Journal Articles (Refereed Article)
Publication Type Code c1

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