post-Kyoto Protocol Research Articles

The ESG washing in banks: Evidence from the syndicated loan market

We investigate whether banks practice environmental, social, and governance (ESG) washing in their lending decisions and how the market reacts. That is, do banks with worse ESG performance intentionally lend to firms with better ESG performance to improve their ESG reputations? Banks with worse ESG performance offer significantly lower loan spreads, longer loan maturities, fewer general covenants, and fewer collaterals to firms with better ESG performance. More importantly, the stock market generally reacts favorably to banks that make these kinds of deals, which could explain why banks engage in ESG washing. We also find that the effects of ESG washing are significantly stronger for borrowers from high-polluting industries and in the post-Kyoto Protocol period. These results support the idea that the banks with worse ESG performance use ESG-washing lending to improve their ESG reputations.

Market Mechanisms for Reducing Emissions and the Introduction of a Flexible Consumption Tax

Since its founding institutions the European Economic Community and Eratom, the European Union has paid great attention to energy issues. However, its powers have been updated in relatively recent times. Similarly, the EU has promoted in the post-Kyoto Protocol environmental issues with a leading by example approach and implementing an ambitious plan to decarbonize the economy with the energy transition and emission limitation through a market instrument, the emission trading system. The European emissions trading system has been the most ambitious management of negative externalities related to GHG set-up at the international level. The EU now considers that the costs of ecological industrial transition could limit the ability of European industries to compete in the globalized market with industries not subject to similar limits and costs. The EU intends to adopt a carbon adjustment tax at the border, to limit the phenomenon of reallocation and compensate for environmental costs. This paper analyses the various proposals and their advantages and disadvantages. The focus is on the charge on emissions mechanism, which is one of the three proposals the European Economic and Social Committee suggested to the European Commission for further investigation in view of the current competitive asymmetry now recognized by the EU Commission itself. The charge on emissions would value industrial emissions directly within the VAT and use the blockchain to track the emissive supply chain of products.

Impact assessment of trade on environmental performance: accounting for the role of government integrity and economic development in 79 countries

Trade has become a carrier for transporting both clean and dirty (pollution-intensive) goods, services and technologies between countries. While the impact of trade on economic development has been reported in the extant literature, insufficient and inconsistent results exist between pollution-embedded trade and environmental performance. Using the Ordinary Least Squares (OLS), Generalized method of moments and panel quantiles via Moments, this study explored the role of government integrity on trade-environment nexus in the post-Kyoto protocol era for 79 countries between 2008 and 2018. The empirical results suggest that per capita GDP and government integrity improve environmental performance whereas trade impedes it. In the quantile regression model, the effect of government integrity is significant at the median quantiles with a stronger effect in countries with higher environmental performance. The negative effect of trade is not only significant from the lower quantile through the median quantile but decreases in magnitude, tracking from countries with lower to higher environmental performance. While the positive effect of government integrity is significant from the median quantile onwards, the negative effect of trade is only significant in the lower quantile. Robustness analysis from the GMM dynamic panel estimation technique shows that interacting government integrity with trade yields a positive and significant coefficient. Meaning that improved government integrity averts the negative effect of trade on environmental performance. The study suggests that outsourcing the regulations of trade-oriented multinational companies operating in developing economies with weak institutions to global humanitarian organisations such as the United Nations would be the first step to reduce trade-attributable environmental degradation.

Consolidated Climate Markets Mechanism Analysis—Case Studies of China, Japan, and Taiwan

The post-Kyoto Protocol era has seen a transition to focus on the development of a renewable energy (RE) market as a primary instrument to reduce greenhouse gas (GHG) emissions worldwide. This paper analyses the development of GHG reduction and RE market in China, Japan, and Taiwan that are geographically proximate but socioeconomically diverse, and each plays a different but significant role in the world’s economy. By deploying a consolidated model incorporating the key components of market drivers underlying the goal of achieving GHG reduction, we threaded through the policy- and market-instruments implemented for each of the case studies over the past 20 years using the model. One commonality is that subsidiary schemes in the form of feed-in tariffs have served as an effective policy tool to boost the growth of renewable energy installations, though the worsening financial burden renders this path unsustainable. Over-reliance on feed-in-tariff schemes may have also impeded the liberation of an energy market pivotal to the success of elevating RE portfolio through trading mechanisms. What followed were the implementations of renewable energy certificate (REC) systems that have experienced various roadblocks leading to failures of the certificate market. By understanding the paths engaged in each of the cases, a conceptualized strategy depicted by the consolidated model is proposed to show the links between a renewable market and a carbon market. The framework would expedite the trading of RECs and carbon credits to accelerate the attainment of GHG emission reduction goals.

Kazakhstan's CO2 emissions in the post-Kyoto Protocol era: Production- and consumption-based analysis

The first commitment period of the Kyoto Protocol came to an end in 2012 and more developing countries began to participate in the new phase of world carbon emission reduction. Kazakhstan is an important energy export country and a pivot of the "Belt and Road Initiative" (BRI). Despite its emissions are relatively small compared with huge emitters such as China and the US, Kazakhstan also faces great pressure in terms of CO2 emission reduction and green development. Accurately accounting CO2 emissions in Kazakhstan from both production and consumption perspectives is the first step for further emissions control actions. This paper constructs production-based CO2 emission inventories for Kazakhstan from 2012 to 2016, and then further analyses the demand-driven emissions within the domestic market and international trade (exports and imports) using environmentally extended input-output analysis. The production-based inventory includes 43 energy products and 30 sectors to provide detailed data for CO2 emissions in Kazakhstan. The consumption-based accounting results showed that certain sectors like construction drive more emissions and that the fuel consumption in different sectors varies. Furthermore, Russia and China are major consumers of Kazakhstan's energy and associated emissions, with the construction sector playing the most important role in it. The results suggested that both technology and policy actions should be taken into account to reduce CO2 emissions and that the BRI is also a good chance for Kazakhstan to develop a "Green Economy".

航空輸送事業の気候変動対策とグローバル・セクター・アプローチ : ポスト京都議定書へ向けた自主的取り組みの可能性

航空輸送事業の気候変動対策とグローバル・セクター・アプローチ : ポスト京都議定書へ向けた自主的取り組みの可能性

The Kyoto Protocol and CO2 emission: is India still hibernating?

PurposeThe purpose of this study is to investigate the relationship between CO2 emission and its core determinants, namely, economic growth, energy consumption and trade openness in the pre- and post-Kyoto Protocol era in the Indian economy.Design/methodology/approachThe study uses the ARDL bounds test to analyze the long-run and short-run empirical relationship between the interested variables for the time period 1971-2013. A dummy variable representing the Kyoto Protocol regime has been included to examine the likely impact of international climate policies (Kyoto Protocol) in controlling and reducing CO2 emission in India.FindingsThe empirical results indicate the possibility of increase in CO2 emission from India even after the Kyoto Protocol regime. Evidence of inverted U-shaped relationship between CO2 emission and economic growth (EKC hypothesis) has been confirmed. However, compared to increase in CO2 emission, the magnitude of decrease due to improvement in economic growth is relatively lesser. Energy consumption and trade openness are also found to increase CO2 emission.Research limitations/implicationsThe results indicate that there is a lack of commitment on the part of India to curtail CO2 emission, which can be disastrous for future prosperity. Financing the renewable electricity generation, R&D subsidy and tax-free renewable energy seems to be imperative to address this catastrophic problem.Originality/valueThis study is the first attempt to analyze the impact of international climate policy (Kyoto Protocol) on CO2 emission by incorporating a fixed dummy in the ARDL specifications.

Makers, Takers, Shakers, Shapers: Emerging Economies and Normative Engagement in Climate Governance

This article builds on recent literature to argue that emerging economies are simultaneously norm takers and norm makers involved in a two-way socialization process with developed countries. It does this by tracing China's engagement in negotiations surrounding the norm of common but differentiated responsibilities within the UN Framework Convention on Climate Change between the 2007 Bali conference that set out to negotiate a post–Kyoto Protocol climate agreement and the 2015 Paris conference that succeeded in doing so. In making this argument, I push against the predominant unidirectional and dyadic models of normative change by illuminating the more complicated role emerging economies are playing in this process. The article further distills a typology of normative change from the literature to help us understand how and why emerging economies engage in this process.

A Study on the Countermeasures about Changes in Global Environmental Regulations of Post-Kyoto Protocol - Focused on the Comparison of South Korea and Japan -

A Study on the Countermeasures about Changes in Global Environmental Regulations of Post-Kyoto Protocol - Focused on the Comparison of South Korea and Japan -

Exploring the impact of determining factors behind CO2 emissions in China: A CGE appraisal.

Along with the arrival of the post-Kyoto Protocol era, the Chinese government faces ever greater pressure to reduce greenhouse gases (GHGs). Hence, this paper aims to discuss the drivers of carbon dioxide (CO2) emissions and their impact on society as a whole. First, we analyzed the background and overall situations of CO2 emissions in China. Then, we reviewed previous studies to explore the determinants behind China's CO2 emissions. It is widely acknowledged that energy efficiency, energy mix, and economy structure are three key factors contributing to CO2 emissions. To explore the impacts of those three factors on the economy and CO2 emissions, we established a computable general equilibrium (CGE) model. The following results were found: (1) The decline of a secondary industry can cause an emission reduction effect, but this is at the expense of the gross domestic product (GDP), whereas the development of a tertiary industry can boost the economy and help to reduce CO2 emissions. (2) Cutting coal consumption can contribute significantly to emission reduction, which is accompanied by a great loss in the whole economy. (3) Although the energy efficiency improvement plays a positive role in promoting economic development, a backfire effect can weaken the effects of emission reduction and energy savings.

Shaping China’s Climate Diplomacy: Wealth, Status, and Asymmetric Interdependence

China’s diplomacy in the post-Kyoto Protocol international climate change negotiations (ICCN) under the United Nations Framework Convention on Climate Change (UNFCCC) bears proactive and reactive feature. On the one hand, China has proactively built several new coalitions including its bilateral climate coalition with India, the BASIC group and the Like-minded Developing Countries (LMDCs) while maintaining its traditional coalition with the Group-77 and China to facilitate its bargaining power against developed countries and their negotiating blocs. On the other hand, however, China has reactively made significant compromises to its negotiation partners on mitigation obligations of greenhouse gas emissions. Such a proactive and reactive feature of China’s climate diplomacy has been mainly shaped by: first, China’s desire to maximize its wealth/profits from its participation in the Clean Development Mechanism; secondly, its desire to build a responsible great power status in the international system; and thirdly, its asymmetric dependence on the developed countries especially the US and the EU for transferring climate mitigation-related technologies.

COP 21 and the evolution of climate change governance

Climate change is a global problem that requires collective action. While the international community has been slow in taking effective action in limiting global temperature rise, the 21st Congress of the Parties of the United Nations Framework Convention on Climate Change may prove to be a milestone in climate negotiations. Past climate deals failed in part due to their attempts to impose mitigation targets on reluctant countries, rather than allowing each country to set its own targets that it believes is achievable. The subsequent Paris Agreement is a post-Kyoto Protocol emissions reduction framework beyond 2020 which aspires to prevent global temperature increase below the 2°C benchmark. Whether countries will heed emission reduction calls and the 2°C global temperature goal is achieved remain to be seen.

What Can Be Done to Blunt Potential Conflict between Climate Change and Trade Policies?

The December 2015 COP 21 meeting aspires to establish a post-Kyoto Protocol agreement for addressing climate change. The shift in emphasis towards self-determined emission targets in the COP21 approach to mitigation may raise the risk of disputes over the use of border measures as part of nationally determined climate strategies. This paper discusses the tax policies at the border and subsidy elements of climate change-motivated measures and the policy reactions that may follow in cases where prior agreement has not been secured in relation to the permissible use of these instruments.

Legal and Policy Implications on the Post-Kyoto Protocol System: A Korean Lawyer's Viewpoint

In 1997, the Kyoto Protocol was established as the first global treaty imposing legallybinding targets on the developed countries, imploring countries to curb greenhouse gases emissions from 2008 to 2012. In 2012, the Doha Amendment was agreed upon to extend KP for seven more years, from 2013 to 2020. However, it is not yet in force due to lack of ratification. The UN is trying to build a new international climate change system to succeed KP, which will encompass both the developing countries and the developed countries after 2020. The US, China, the EU and Japan are the four largest GHG emitters. Through the first period of KP, the international climate change system became an international political and economic network, creating new paradigms for energy resources, ways of life, carbon market, and economic development, et cetera. This article will show some of the underlying political and economic dynamics and responses of those four countries and Korea around the PostKP negotiations.

Research on China’s Forest Carbon-Sink Policy Path in Coal Mines

In post-Kyoto Protocol times, forest carbon-sink has become one of the key path choices to realize clean development for coal mining area to govern ecological environmental pollution. In practice, big challenge is to set up effective and systematic government policies for forest carbon-sink in coal mines. For China, it is just at beginning in policies. Currently, China’s forest carbon-sink policies for coal mines ought to be set up in terms of industry, finance and law.

Research on Market Model for China Forest Carbon-Sink in Coal Mines

In post-Kyoto Protocol times, forest carbon-sink has become one of the key path choices to realize clean development for China. Currently, China’s carbon market system has not come into being. So it is necessary to take government-leading model to establish three market systems. They are property relations of coal forest, binding planning for GDP carbon emission intensity and credit trading system of forest carbon-sink. Based on market systems, certified emission reductions (CERs) and voluntary emission reductions (VERs) in mining industry can be developed.

Sustaining the emerging carbon trading industry development: A business ecosystem approach of carbon traders

This paper explores how carbon traders nurture the business ecosystem to sustain the emerging carbon trading industry development. We collected primary data from a multinational carbon trader and its ecosystem partners in China, through the construction of interviews and documentary. The research findings show the carbon trading industry has experienced four-stage evolution with different driving forces; the carbon trader attracted and organized ecosystem partners to facilitate the CDM project owners to create carbon credits and trade them; a systematic business ecosystems approach through the lens of Context, Cooperation and Configuration, initiated by carbon traders, has facilitated the industry development. Our findings also implicate to industrial practitioners and policymakers for sustaining the emerging industry development at both the current- and the post-Kyoto protocol periods.

States’ interests at international climate negotiations: new measures of bargaining positions

To advance empirical research on international environmental institutions, new data on national positions at the international climate change negotiations are introduced. The observations cover more than 90 countries at two historical moments of climate change decision making: the pre–Kyoto Protocol enforcement (2001–2004) and the post–Kyoto Protocol (2008–2011) meetings. Data were collected from different types of written text. Coding entailed a qualitative (dictionary-based) content analysis and a quantitative text analysis. By systematically exploring these new data, I offer a ‘map’ of national preferences at the United Nations Framework Convention on Climate Change (UNFCCC). I also propose a discussion of the dimensions of conflict and policy competition over 10 years of climate negotiations.

중국 화력발전산업의 CO2암묵가격 및 잠재감축량, 연료에 대한 대체가능성 분석

China, the world`s largest producer, is likely to be obligated to reduce greenhouse gas emissions under the post-Kyoto protocol. This paper estimates a Shephard input distance function for the Chinese fossil-fueled power generation sector to measure the shadow price of emissions, technical efficiency, and indirect Morishima elasticities of substitution between inputs. Empirical results show that, on average, it costs approximately 3.2 US dollars per year to reduce emissions by one ton over the period 1981-2009. This finding indicates that Chinese power sector is expected to benefit from selling emission permits to other countries such as Korea and Japan, given that our estimate for China is lower than the ones previous literatures estimated for the power sector in these countries. The maximum attainable average reduction potential amounts to approximately 25 million tons per year by improving technical efficiency. Capital is substitutable with both coal and oil and capital is relatively more readily substituted for these fuels.

Climate change from an EU-China perspective: the legal framework for a sustainable global market

The workshop on ‘‘Climate Change from an EU-China perspective: The Legal Framework for a Sustainable Global Market’’, which was part of a project supported by a China-EU School of Law (‘‘CESL’’) research grant, took place at the University of Bologna, Faculty of Law, on November 18 and 19, 2011. The Opening Session, chaired by Prof. Marina Timoteo (University of Bologna), was dedicated to the topic of ‘‘Climate Change and Trade Liberalization in a Global Legal Setting’’. In this session Dr. Valentina Jacometti (University of Insubria) outlined the main features of the current EU emissions trading system in light of the revised Emissions Trading Directive of 2009. Dr. Jacometti observed that, with regards to linking to other emissions trading systems, the EU vision is to link up with comparable cap-and-trade schemes in industrialised countries to create first a carbon market among member countries of the OECD by 2015 at the latest. This should then be extended to include the major emitting sectors in the economically more advanced developing countries by around 2020 through the creation of new sector-specific market mechanisms. In pursuing this last objective, as was pointed out by Dr. Elisa Baroncini (University of Bologna) in her presentation, given the difficulties of the international community converging on commonly shared ways for implementing the general principles stated in the United Nations Framework Convention on Climate Change (UNFCCC) and the postKyoto Protocol, the WTO system will play a crucial role, fostering the harmonization of climate change laws, and avoiding or limiting trade obstacles and distortions while promoting sustainable development. As Dr. Baroncini outlined, the treaty system of the WTO is already playing a fundamental role in shaping the global environmental legal framework and China is becoming more and more involved in this area, as demonstrated in the latest dispute on Chinese export restrictions on raw materials. In order to better