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Do Collective Actions Clear Common Air? The Effect of International Environmental Protocols on Sulphur Emissions

We consider the effects of voluntary international environmental protocols on emissions with regard to the 1985 Helsinki Protocol and the 1994 Oslo Protocol on the reduction of sulphur oxides. Our analysis utilizes panel data from 30 European countries for the period 1960–2002. We divide these countries into “participants” and “non-participants”, i.e., those that did and those that did not ratify the specific protocol. We use a difference-in-difference estimator that focuses on the difference in emissions before and after signing a specific protocol and compares it with this difference for non-participant countries. Difference-in-difference estimation methods rely on annual data and may induce serial correlations in the variables. We use randomly generated placebo protocols to test the estimated effects. In a panel data regression model, where we include country and year dummies, the effect of the Helsinki agreement in reducing sulphur emissions is around three per cent per year, and the effect of the Oslo agreement is around four per cent per year. Correcting the standard errors for serial correlation in both dependent and independent variables is important and overlooked in the previous empirical literature on the evaluation of international agreements.

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Paper provided by University of Bergen, Department of Economics in its series Working Papers in Economics with number 10/07.

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Length: 37 pages
Date of creation: 13 Jul 2007
Date of revision:
Handle: RePEc:hhs:bergec:2007_010
Contact details of provider: Postal: Institutt for økonomi, Universitetet i Bergen, Postboks 7802, 5020 Bergen, Norway
Phone: (+47)55589200
Fax: (+47)55589210
Web page: http://www.uib.no/econ/enEmail:


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  2. Lee, Myoung-jae, 2005. "Micro-Econometrics for Policy, Program and Treatment Effects," OUP Catalogue, Oxford University Press, number 9780199267699, March.
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  9. Bratberg, Espen & Tjøtta, Sigve & Øines, Torgeir, 2003. "Do voluntary international environmental agreements work?," Working Papers in Economics 06/03, University of Bergen, Department of Economics.
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  12. Murdoch, James C. & Sandler, Todd, 1997. "The voluntary provision of a pure public good: The case of reduced CFC emissions and the Montreal Protocol," Journal of Public Economics, Elsevier, vol. 63(3), pages 331-349, February.
  13. Michael Hoel, 1992. "International environment conventions: The case of uniform reductions of emissions," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 2(2), pages 141-159, March.
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  17. Carraro, Carlo & Siniscalco, Domenico, 1998. "International Institutions and Environmental Policy: International environmental agreements: Incentives and political economy1," European Economic Review, Elsevier, vol. 42(3-5), pages 561-572, May.
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  19. Helland Eric & Tabarrok Alexander, 2004. "Using Placebo Laws to Test "More Guns, Less Crime"," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-9, January.
  20. Daniel Matisoff, 2010. "Are international environmental agreements enforceable? implications for institutional design," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 10(3), pages 165-186, September.
  21. Murdoch, James C & Sandler, Todd & Sargent, Keith, 1997. "A Tale of Two Collectives: Sulphur versus Nitrogen Oxides Emission Reduction in Europe," Economica, London School of Economics and Political Science, vol. 64(254), pages 281-301, May.
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