Abstract
International climate agreements such as the Kyoto Protocol of 1997 and, more recently, the Paris Climate Agreement are fragile because, at a national level, political constituencies’ value systems may conflict with the goal of reducing greenhouse gas (GHG) emissions to sustainable levels. Proponents cite climate change as the most pressing challenge of our time, contending that international cooperation will play an essential role in addressing this challenge. Political opponents argue that the disproportionate requirements on developed nations to shoulder the financial burden will inhibit their economic growth. We find empirical evidence that both arguments are likely to be correct. We use standard regression techniques to analyze a multi-country dataset of GHG emissions, GDP per capita growth, and other factors. We estimate that after the Kyoto Protocol (KP) entered into force ‘Annex I’ countries reduced GHG emissions on average by roughly 1 million metric tons of CO2 equivalent (MTCO2e), relative to non-Annex I countries. However, our estimates reveal that these countries also experienced an average reduction in GDP per capita growth rates of around 1–2 percentage points relative to non-Annex I countries.
Highlights
The nexus between economic output and the environment has long been a key topic in economic and policy research, with respect to sustainable development goals
In addition to our primary specifications described by regression Equations (1) and (2), we explore several robustness checks that support our identification of the Kyoto Protocol (KP) as having significantly impacted greenhouse gas (GHG) emissions and economic growth for Annex I countries
There is still compelling evidence in the full sample and the Organization for Economic Cooperation and Development (OECD) subsample regressions to support the hypothesis that Annex I countries experienced lower economic growth relative to non-Annex I countries after the Kyoto Protocol entered into force
Summary
The nexus between economic output and the environment has long been a key topic in economic and policy research, with respect to sustainable development goals. An article from 7 November 2017 by the nationally syndicated American newspaper USA Today reported that after Syria had announced its intent to join the Paris Agreement a week prior, this left the U.S as the sole country not participating in the Agreement [1] This has reignited the debate (at least in the U.S.) about the effectiveness of climate agreements in curbing greenhouse gas (GHG) emissions at the alleged expense of economic growth. It is important to point out that neither the Huang et al or Achiele and Felbermayr studies test for the impact of the KP on GDP per capita growth, which is another key distinction of our work
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