Industrial N2O projects under the CDM: adipic acid - a case of carbon leakage?

This paper evaluates projects under the Clean Development Mechanism (CDM) that abate N2O emissions from adipic acid production. The research shows that carbon markets enabled N2O emissions abatement levels that had not previously been achieved. However, data on adipic acid production, plant utilization and international trade patterns show that the CDM appears to have caused significant carbon leakage during the economic downturn in 2008 and 2009. Adipic acid production partially shifted from plants which installed abatement technology in the 1990s to CDM plants. The paper also evaluates policy solutions to prevent carbon leakage in the future.