**Table 3: Aggregated scale of transaction costs related to renewable energy technology**

|**Case study**|**Nature of Transaction Costs**|**Scale of Transaction Costs**|**Reference**|
|---|---|---|---|
|Admire Rebus Report|Search and pre-feasibility, negotiation<br>and development, approval and<br>administrative procedures (planning<br>phase)|9% of total investment costs|Skytte et al. (2003, pp.<br>66-67)|
||Monitoring (accounting and<br>verification), enforcement and<br>adjustment costs (production phase)|7% of total investment costs||
|Trading of Green<br>Certificates, the<br>Netherlands and<br>Sweden|Costs undertaken by obligated parties<br>beyond costs of meeting the obligation<br>itself; including costs to handle quota<br>obligation on behalf of end-users (for<br>the specific TGC scheme in Sweden)|2.5% of total activity costs<br>18% of the total costs|Oikonomou and<br>Mundaca (2008, pp.<br>224–225); Kåberger et<br>al. (2004, p. 687)|
|Renewable Portfolio<br>Standard, Texas (US)|Search, negotiation and contracting,<br>metering/auditing/billing,<br>paying/monitoring, calculation of<br>obligated amounts, submission of<br>certificates, monitoring, enforcing,<br>issuance of certificates, reporting and<br>adapting, application for certificates.|2.9 % of the value of the RE<br>electricity|Langniss (2003, p. 230)|
|German Renewable<br>Act|Direct TCs (excluding indirect TCs<br>being costs related to governance):<br>negotiation and contracting of<br>secondary duties, capacity calculation,<br>metering, billing, paying, auditing,<br>accounting, biannual report and<br>clearance.|1.3% of the value of the RE<br>electricity|Langniss (2003, p. 231)|
|Sugar cane for<br>electricity generation,<br>Brazil|Search and information, risks related to<br>non compliance (fines), negotiation and<br>renegotiation of contracts, insurance,<br>compliance.|n/a|Nagaoka (2002)|

That said, the German Federal Ministry of the Environment, Nature, Conservation and Nuclear Safety (2007) also identified several sources of TCs. According to this organization, TCs include costs for the Programme Design and Document (PDD) development and baseline determination, approval from the relevant designated national authority (DNA), validation, and registration at the CDM Executive Board. Based on the application of the Delphi method, it is found that one of the most important sources of TCs is the PDD. The PDD includes the calculation of the baseline emissions of the project which represent a burdensome task, as well as the demonstration of additionality required for the validation of the project. The project developer must be able to prove that emissions reductions are “additional” in comparison to what would have occurred under business as usual.

For the specific case of small-scale CDM wind-energy projects, Mundaca and Rodhe (2005) identified the nature of TCs and provide quantitative estimates, albeit aggregate. Identified TCs include negotiation with potential developers and CERs buyers, ensuring host country approval, setting the emission baseline and additionality, validation of the baseline, development of monitoring plans, contracting international auditing, etc. TCs were estimated on the basis of two sources: information obtained from wind energy developers in India, and data obtained from consultancies already providing

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