The international carbon market, specifically the Clean Development Mechanism (CDM) created by the Kyoto Protocol, is an important contributor to the breathtaking growth of renewable energy in China. Ever since its debut, it has been at the center of the policy debate whether the CDM achieves...

The Clean Development Mechanism (CDM) allows industrialized countries to comply with the Kyoto Protocol by using carbon offsets from developing countries. There are two puzzles within this carbon market: additionality (the proposed activity would not have occurred in its absence) and co-benefits...