Flexible Mechanisms in the Corporate Greenhouse: Implementation of the Kyoto Protocol and the Globalization of the Electric Power Industry

Abstract

The contradictions and unresolved tensions between economic globalization and climate change negotiations have added urgency to the climate change debate. The paper argues that the declining role of the nation state in the global economy and the increasing reach of transnational corporations throughout the world present a serious challenge to the environmental integrity and success of international environmental treaties such as the Kyoto Protocol. In particular efficacy and equity of the flexible mechanism under the Kyoto Protocol are questioned as illustrated by the patterns of Foreign Direct Investment (FDI) of the U.S. electric power industry in the developing world. U.S. FDI in the electric power sectors of developing countries supports continued carbon-intensive development patterns which will make the long-term goals of the Kyoto Protocol more difficult to achieve. Consequently, FDI raises questions about justifiability of giving credits to Annex I countries through CDM projects undertaken by transnational electric power corporations.

Keywords

transnational corporations joint implementation Clean Development Mechanism Globalization of the Electric Power Industry

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