The effects of the “Zero Routine Flaring by 2030” initiative: International comparisons based on generalized synthetic control method

Abstract

Environmental initiatives play an important role in reducing global greenhouse gas emissions. The “Zero Routine Flaring by 2030” (ZRF) Initiative, launched by the World Bank in 2015, has been widely echoed worldwide by major oil-producing governments, oil companies, and energy institutions. Based on the generalized synthetic control method, we use panel data covering 45 major oil-producing countries to conduct an empirical analysis of the gas flaring reduction effect within the ZRF Initiative from 1994 to 2021. In addition, we use the Multiphase difference-in-differences model to test the robustness results and analyze the impact mechanism. The results show the following: (1) The ZRF Initiative has a significant impact on reducing flaring in the endorsing countries, and the effect is particularly significant in developing countries. (2) In some developing countries, the ZRF Initiative could reduce domestic flaring through demonstration effects, and asset income in the oil industry can positively moderate the Initiative's flaring reduction effect. (3) The ZRF Initiative and the practical experiences of the participating countries provide valuable insights into the goal of zero routine flaring by 2030 for oil-producing countries. This paper provides a new perspective on the effectiveness of policy evaluation by the World Bank, and provides a diffusion mechanism for the policy implementation process.