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The Public Economics of the Montreal Protocol on the Ozone Layer

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  • Sandler, Todd
  • Murdoch, James

Abstract

This paperpaper applies the modem theory of voluntary provision of a pure public good to the behavior of nations to curb chlorofluorocarbons (CFCs) emissions in the late 1980s. By devising empirical tests, we demonstrate that these cutbacks in emissions are entirely consistent with non-cooperative behavior. Regression results indicate that the preponderance of the variation in CFCs emission reductions can be explained by national income and two taste parameters. Rank-ordered statistics provide further support that these variables underlie participation in the initial stipulations of the Montreal Protocol on protecting the ozone layer. These findings suggest that the treaty may be more symbolic than a true instance of cooperation. When our procedures are applied to the Helsinki Protocol, which limits sulfur emissions in Europe, we discover that nations are behaving differently than in the case of CFCs emissions. We attribute this difference to impurely public characteristics of sulfur emissions where depositions vary according to location and other considerations. Our procedures can be applied to a wide range of environmental scenarios including those involving a regional group of developing countries.

Suggested Citation

  • Sandler, Todd & Murdoch, James, 1994. "The Public Economics of the Montreal Protocol on the Ozone Layer," Institute for Policy Reform Working Paper Series 294835, Institute for Policy Reform.
    • Handle: RePEc:ags:iprwps:294835
    DOI: 10.22004/ag.econ.294835
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    1. Carraro, Carlo & Siniscalco, Domenico, 1992. "The international dimension of environmental policy," European Economic Review, Elsevier, vol. 36(2-3), pages 379-387, April.
    2. Andreoni, James, 1988. "Privately provided public goods in a large economy: The limits of altruism," Journal of Public Economics, Elsevier, vol. 35(1), pages 57-73, February.
    3. Andreoni, James & McGuire, Martin C., 1993. "Identifying the free riders : A simple algorithm for determining who will contribute to a public good," Journal of Public Economics, Elsevier, vol. 51(3), pages 447-454, July.
    4. Bienen, Henry & van de Walle, Nicolas, 1989. "Time and Power in Africa," American Political Science Review, Cambridge University Press, vol. 83(1), pages 19-34, March.
    5. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
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