Does environmental diplomacy reduce CO2 emissions? A panel group means analysis

Abstract

We examine the impact of environmental diplomacy on a country's carbon emission level. Specifically, we test if the signing of environmental treaties yielded positive responses in CO2 emission. We employ common correlated effects mean group models on panel data of 76 developed and developing countries for over 35 years. Our analysis indicates that environmental diplomacy reduces CO2 emissions for developing countries in the short run. However, the results of FMOLS in the long-run estimates indicate that developed and developing countries do not adhere to treaty requirements as CO2 emissions increases with more treaties. Overall, our results imply that the signing of environmental treaties is likely to be mere international diplomacy that yields no result on climate change. We suggest that countries should fulfill their obligation under treaties rather than engage in annual rituals of signing treaties.