Abstract

Following the failure of climate governance regimes that sought to impose legally binding treaty-based obligations, the Paris Agreement relies on voluntary actions by individual countries. Yet, there is no guarantee that unilateral policies will lead to a decrease in carbon emissions. Critics worry that voluntary climate measures will be weak and ineffective, and insights from political economy imply that regulatory loopholes are likely to benefit carbon-intensive sectors. Here, we empirically evaluate whether unilateral action can still reduce carbon pollution by estimating the causal effect of the UK’s 2001 Climate Change Programme (CCP) on the country’s carbon emissions. Existing efforts to evaluate the overall impact of climate policies on national carbon emissions rely on Business-As-Usual (BAU) scenarios to project what carbon emissions would have been without a climate policy. We instead use synthetic control methods to undertake an ex post national-level assessment of the UK’s CCP without relying on parametric BAU assumptions and demonstrate the potential of synthetic control methods for climate policy impact evaluation. Despite setting lax carbon targets and making substantial concessions to producers, we show that, in 2005, the UK’s CO2 emissions per capita were 9.8% lower relative to what they would have been if the CCP had not been passed. Our findings offer empirical confirmation that unilateral climate policies can still reduce carbon emissions, even in the absence of a binding global climate agreement and in the presence of regulatory capture by industry.

Highlights

  • In recent years, policies to reduce greenhouse gas emissions (GHG) have been deployed at a rapid pace across the world

  • We show that a unilateral climate policy in the UK meaningfully reduced carbon pollution, even in the absence of a legally binding global climate treaty

  • We show that the UK reduced its per capita carbon pollution by 9.8% in the face of free-riding disincentives to act

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Summary

Introduction

Policies to reduce greenhouse gas emissions (GHG) have been deployed at a rapid pace across the world. Climatic Change (2021) 166: 31 merits of different types of policy instruments, we still do not know enough about the extent to which these policies work in the context of real-world, practical implementations. Identifying the specific impacts of climate policies on environmental outcomes is a difficult task. Most efforts to identify the effect of specific climate reforms on carbon pollution levels are either ex ante economic simulations or ex post sectoral impact analyses. These models excel at simulating how policy instruments will affect different sectors of the economy, identifying economic trade-offs, and exploring sector-specific policy effects. Existing approaches struggle to evaluate the net causal effect of national policies because they compare realized outcomes to business as usual scenarios rather than counterfactual outcomes in the absence of the specific policy

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