Abstract
This study investigates the environmental and economic impacts of the Kyoto Protocol on Annex I parties through an impact assessment by combining the propensity score matching and the difference-in-difference methods. We establish a country-level panel data set including CO2 emissions, gross domestic product (GDP), and other socioeconomic data for 1997–2008 and 2005–2008. Based on the impact evaluation, we conduct the simulation predicting the impacts of the Protocol to capture the differences of marginal damage cost of carbon emissions between the actual and counterfactual situations. The results suggest that participating as an Annex I party has a significant positive impact on CO2 emission reductions, but a negative impact on the GDP of the participants in the long run. The predicted marginal benefit of the Protocol based on the marginal damage cost of carbon emissions shows that the marginal benefit of emission reductions mitigates a limited portion of the GDP loss. Future global climate change frameworks should focus on balancing the impact on economic and environmental performance in order to ensure sustainable development, especially for developing countries that have low capacity to mitigate emissions.
Highlights
The intensification of transboundary environmental issues in the past half century has underscored the need to establish effective international instruments [1, 2]
The program impact variables—the Annex I dummies—show a negative sign in all models; only the coefficient of the 2005 base-year model exhibits statistical significance at the 1% level. These results indicate that, between 2005 and 2008, Annex I parties accomplished greater CO2 emission reductions than non-Annex I parties
These highly significant results suggest that it takes time for the Protocol to reduce the emissions of Annex I parties. It indicates that imposing emission reductions targets has a beneficial impact on reducing CO2 emissions in the long run
Summary
The intensification of transboundary environmental issues in the past half century has underscored the need to establish effective international instruments [1, 2]. The rise in the number of IEAs has led to a corresponding increase in the number of studies investigating and evaluating their effectiveness. Scholars have conducted quantitative analyses by applying diverse methodologies and establishing data sets to estimate the impact of IEAs. the results obtained in previous studies remain controversial. Proponents insist that an IEA has a significantly positive impact on improving environmental quality [4, 5], while opponents consider it an empty promise that involves large expenses for implementation [6,7,8,9]. The endemic nature of international policy—for example, many actors, different socioeconomic conditions among parties, analysis, and data sets on this topic—has become limited
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