Impacts on sustainable development of two CDM projects : A comparison using AHP method

Abstract: Nowadays the mitigation of climate change and the reduction of greenhouse gases are one of the priorities in the international affairs. Clean Development Mechanism (CDM) is one of the products generated according to this request. For China, CDM brings advanced technologies in terms of energy saving and emission reduction, and driving forces for sustainable development, hereby the development of CDM projects is in full swing in China so far. However, it is not easy to decide which type of CDM projects is suitable for a certain city or region, which project contributes more to sustainable development compared with others, when it comes to several alternatives. In this case, decision-makers require a tool to help make a rational decision. As one of the approaches of assisting in making decisions, the Analytic Hierarchy Process (AHP) is able to provide assistance for decision-makers to compare the contribution of discrepant CDM projects to sustainable development. Moreover, a case study is taken between two typical CDM projects: HFC23 decomposition project and small-scale hydropower project, so as to check if AHP is useable. The result of the case study indicates that HFC23 decomposition project contributes more than small-scale hydropower plant project to sustainable development, which is not in line with China’s CDM development trend for these two projects (NCCCC, 2005), due to the different represented interests of the study group and the real decision-makers. Nevertheless, the result is rational and valid since there is nothing wrong with the AHP method and its application. In addition, in order to improve the effect of assisting in decision making, AHP was tried to be improved in three respects: impairing subjectiveness, avoiding rank reversal and improving accuracy. Even though for AHP itself, DEA/AHP approach could successfully eliminate the subjectiveness, however when it comes to this very case: compare CDM projects in terms of contribution to sustainable development in China, it cannot play an effective role. Moreover, PCA/AHP method cannot eliminate the subjectiveness at the root either. The framework method provides a possibility in theory to increase objectiveness. Two expects provided a feasible way to avoid rank reversal in their article, and the two pathways of improving results accuracy mentioned in this thesis are considered inappropriate in this case. On the other side, concerning AHP application, how to covert realistic issues to AHP structure, how to get desirable initial information, and how to avoid limitation generated by considerable criteria, sub-criteria and alternatives are considered as the difficulties which should be paid attention. In future, AHP could be applied frequently and effectively concerning providing assistance in making decisions in China, if the stakeholders as many as possible are involved in decision-making process.