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Did the Kyoto Protocol fail? An evaluation of the effect of the Kyoto Protocol on CO2 emissions

Grunewald, Nicole, Martinez-Zarzoso, Inmaculada
Environment and development economics 2016 v.21 no.1 pp. 1-22
carbon dioxide, greenhouse gas emissions, issues and policy, models
In this paper, we empirically investigate the impact of the Kyoto Protocol on CO₂ emissions using a sample of 170 countries over the period 1992–2009. We propose the use of a difference-in-differences estimator with matching to address the endogeneity of the policy variable, namely Kyoto commitments. Countries are matched according to observable characteristics to create a suitable counterfactual. We correspondingly estimate a panel data model for the whole sample and the matched sample and compare the results to those obtained using an instrumental variable approach. The main results indicate that Kyoto Protocol commitments have a measurable reducing effect on CO₂ emissions, indicating that a treaty often deemed a ‘failure’ may in fact be producing some non-negligible effects for those who signed it.