Feasibility on using carbon credits: A multiobjective model

This paper aims to examine the economic feasibility on trading Certified Emission Reductions (CERs) from Clean Development Mechanisms (CDM) projects that are related to electricity generation from renewable energy sources in Brazil. Its purpose is to identify favorable conditions for combining CERs trade obtained by generating electricity from wind power, biomass cogeneration and small hydro-power plants, in replace of fossil fuel plants. As those are all seasonal sources, which means that the energy offers swing along the months of the years, some risks arise associated with the CER’s net benefit. Instead of being examined alone, given that some sources can hedge others, the projects are analyzed in a portfolio framework.