The Kyoto Protocol has received much criticism for its effectiveness as well the spillover effect (i.e. carbon leakage and competitiveness loss). This paper provides first evidence of on bilateral trade in environmental goods, which can mitigate prevent damage. Using generalized synthetic control method, I construct counterfactual trading pairs with commitment show that export goods by countrie...

This paper sets out from a brief overview of the fate of market-based instruments in environmental policy in the past and proceeds to discuss the potential benefits and pitfalls of international carbon emission trading (IET), the most promising of the Kyoto mechanisms (IET, JI and CDM). The problems of trading ’hot air’, the supplementarity requirement in Article 17 of the Kyoto Protocol and at...

The negotiation and ratification of the Kyoto Protocol has spawned a body of literature aimed at analyzing the formation of international environmental coalitions. This literature suggests that in equilibrium environmental agreements will have only a small number of signatories. As of April 2007, however, 168 countries have ratified the protocol; thirty-five of which have binding emissions redu...

Abstract A tractable dynamic model of international climate policies is analysed. The choice bargaining game influences participation levels, emission quotas and technology investment levels. I derive several predictions that are arguably consistent with the differences between 1997 Kyoto Protocol 2015 Paris Agreement—including transitioning from former to latter.

The emission limits in the Kyoto Protocol are too generous. Simply tightening these limits, however, will not make a new climate treaty any more effective at addressing climate change unless the other problems with Kyoto are also addressed. A new climate treaty arrangement must enforce both participation and compliance. This might be done by applying an enforcement mechanism, such as a trade re...

Estimates of the costs of implementing the Kyoto protocol are uncertain and most are based on assumptions that necessarily imply high costs. A selection of alternative (often more realistic) assumptions gives estimates that suggest net benefits rather than costs. One high-cost estimate is from the US Energy Information Administration but it is based on a rapid short-term adjustment to Kyoto-typ...

This paper analyses the relationship between different equity rules and the incentives to sign and ratify a climate agreement. A widespread conjecture suggests that a more equitable ex-ante distribution of the burden of reducing emissions would provide the right incentives for more countries particularly big emitters to accept an emission reduction scheme defined within an international climate...