Transcript Schenider_Fox - Viessmann European Research Centre

Explaining the Variation in
Commitment to the Kyoto Protocol in
Annex I and Non-Annex I Countries
Nicholas Schneider1 & Glenn Fox2
September 28, 2007
1. MSc Guelph, now Fraser Institute
2. Professor, Food, Agriculture and Resource
Economics, Guelph
Background
• United Nations Framework Convention on
Climate Change (1992)
– “…stabilization of [GHG] concentrations [to] prevent dangerous
anthropogenic interference with the climate system.”
• Groups countries into
– Annex I: Developed and some EIT countries
– Non-Annex I: Everyone else
• Only Annex I countries have GHG reduction
responsibilities
– Singapore both affluent and emissions intensive, but
not Annex I
Reduction targets
• Kyoto Protocol (1997) set out reduction
targets relative to 1990
– Canada agreed to a 6% reduction
– Iceland agreed to “reduction” target of a 10%
increase
Emissions Target (% Change Relative to Base Year Emissions)
0
Norway
Australia
Iceland
5
Luxembourg
Denmark
Germany
Austria
United Kingdom
Czech Republic
Estonia
Latvia
Liechtenstein
Lithuania
Monaco
Slovakia
Switzerland
Belgium
Italy
Netherlands
Finland
France
Slovenia
Sweden
Romania
Bulgaria
Ireland
Spain
Greece
Portugal
United States
Canada
Japan
Hungary
Poland
Croatia
New Zealand
Russian Federation
Ukraine
Targets reported by the UNFCCC
10
-5
-10
Country
However…
• The “reduction” targets for non-1990 base
year countries (such as Slovenia – 1986)
• The “reduction” targets EU BSA countries
– Agreed to common 8% reduction target in
1997, reallocated in 1999
– In the end, only about half of Annex I
countries agreed to reduce emissions relative
to 1990
Emissions Target (% Change Relative to 1990)
10
0
-10
-20
-30
Norway
Slovenia
Sweden
Romania
Bulgaria
Australia
Iceland
Ireland
Hungary
Spain
Poland
Greece
Portugal
20
Luxembourg
Denmark
Germany
Austria
United Kingdom
Czech Republic
Estonia
Latvia
Lithuania
Slovak Republic
Switzerland
Belgium
United States
Canada
Italy
Japan
Netherlands
Croatia
Finland
France
New Zealand
Russian Federation
Ukraine
Actual targets relative to 1990
30
Status of ratification
Ratified
Austria
Belarus
(no target)
Belgium
Bulgaria
Canada
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Iceland
Ireland
Italy
Japan
Latvia
Kazakhstan
(no target)
Liechtenstein
Lithuania
Luxembourg
Monaco
Netherlands
New Zealand
Not Currently
Ratified
Norway
Poland
Portugal
Romania
Russian Federation
Slovak Republic
Slovenia
Spain
Sweden
Switzerland
Ukraine
United Kingdom
+ 138 Non-Annex I
Countries
Australia
Croatia
Turkey
United States
Emissions reductions
• Canada is about 30% above 1990 levels
• Portugal, Spain and Turkey are more than 30%
above
• Most former Communist Bloc countries are more
than 30% below
Percentage Change in Greenhouse
Gas Emissions, 1990-2004
20
0
-20
-40
-60
-80
Switzerland
Belgium
Netherlands
Japan
Slovenia
Norway
Italy
Finland
Austria
USA
Liechtenstein
New Zealand
Ireland
Australia
Greece
Canada
Portugal
Spain
Turkey
40
Latvia
Lithuania
Ukraine
Estonia
Russia
Belarus
Bulgaria
Romania
Slovakia
Czech Republic
Hungary
Germany
Poland
United Kingdom
Croatia
Iceland
Sweden
Monaco
Denmark
France
Luxembourg
Change in GHG emissions, 1990-2004
80
60
Background - Summary
• There is a wide variation in actual targets,
emissions, and progress towards meeting
targets
• Why? That’s a good question, which the federal
government is asking.
• Especially if Canada is to continue into further
rounds of Kyoto-like agreements
Current Policy Statements
“[A]ny future approaches to new targets for developed
countries should reflect a country’s specific national
circumstances – considerations such as the nature of the
economy and energy sources” Hon. Rona Ambrose
(2006)
“The future international climate change arrangement
needs to reflect differences in economic and social
conditions among economies and be consistent with our
common but differentiated responsibilities and respective
capabilities.” (APEC, 2007)
Research Problem
• How have various economic and political factors
specific to each country thus far influenced
commitment to the Kyoto Protocol?
Measure of commitment?
• Existing measures use ratification as proxy for
commitment
– Doesn’t allow for any variation in commitment among
those that ratified
– Doesn’t account for “symbolic” ratification
• Ratification doesn’t fulfill the main objective of
the Kyoto Protocol
– “[T]o pursue a stabilization of GHG concentrations in
the atmosphere…”
Better measures of commitment
• Two different measures of Kyoto commitment
– The chosen greenhouse gas reduction target
– The actual change in GHG emissions, 1990-2003
More commitment if:
– A stricter reduction target is chosen
– GHG emissions (1990 to 2004) shows a larger
reduction (or smaller increase)
What affects commitment?
• Existing literature tends to use only a few
explanatory factors
• Instead, we test most, and adopt a Public
Choice perspective
• 5 categories of explanatory factors, identified
from previous literature
–
–
–
–
–
Interest group pressure
Geophysical characteristics
Economic growth
Economic structure
Previous climate change policy decisions
Interest group pressure
Size of Environmental NGO
(ENGO) lobby
Size of Coal energy lobby
Size of Academic lobby
Level of
commitment
Higher
Higher or
lower?
Higher
Geophysical characteristics
Level of
commitment
Risk of coastal flooding
Higher
Average temperature
Higher
(approximated by latitude) – REMOVED
Economic growth
Level of
commitment
Population growth
Lower
GDP per caput growth
Lower
GHG intensity growth
(GHG/GDP)
Lower
• Why these three factors?
How to reduce emissions?
1. GHG = GHG/GDP * GDP/Pop * Pop
= Emissions Intensity (e) * GDP per caput (y) * Population (p)
2. %∆E = %∆e + %∆y + %∆p
• Situation in Canada (1990-2004)
- 14% emissions intensity
+ 28% income per caput
+ 15% population
= Overall increase in GHG emissions
-100
Latvia
Lithuania
Ukraine
Estonia
Russia
Belarus
Bulgaria
Romania
Slovakia
Czech Republic
Hungary
Germany
Poland
United Kingdom
Croatia
Iceland
Sweden
Denmark
France
Luxembourg
Switzerland
Belgium
Netherlands
Japan
Slovenia
Norway
Italy
Finland
Austria
USA
New Zealand
Ireland
Australia
Greece
Canada
Portugal
Spain
Turkey
Percentage Change, 1990-2004
Decomposition in Annex I countries
100
50
0
-50
Population
GDP per Capita
Emissions Intensity
GHG Emissions
Economic structure
Economic Freedom
Affluence
Level of
commitment
Higher or
lower?
Higher
Transportation intensity
Lower
Size of primary resource sector
Lower
Share of global CO2 emissions
Lower
Previous climate change policy
decisions
Level of
commitment
Reduction target
(higher is less strict)
Lower
Kyoto Protocol ratification
Higher
Empirical framework
• Reduction targets estimated using OLS
• Change in GHG emissions indirectly
measured as system of 3 equations
GHG = GHG/GDP * GDP/Pop * Pop
Explaining the target:
significant results (OLS)
A lower (-) target is stricter (higher commitment)
• GHG intensity growth (+)
• GDP per caput growth (+)
• Population growth not significant
– 2 of 3 economic growth variables are +, significant
• Transportation dependency (+)
Emissions change in Annex I
• Change in population and GDP/caput explained
by: education, life expectancy, economic
freedom, gross capital formation, and inflation
• A few variables significant to explaining the
change in GHG intensity, but one variable
explains most of the variation:
• A higher (less strict) reduction target was
associated with a larger increase in GHG
emissions (1990-2003)
Emissions change in Annex
I and non-Annex I
• Only 2 variable significant to explaining the
change in GHG intensity (proxied by CO2/GDP)
• A higher transportation dependency is
associated with a larger increase in GHG[CO2]
emissions intensity
• Annex I countries are associated with lower
increases in emissions intensity
Summary of results
• Joint significance tests of categories
Category
F-Statistic
Target
GHG Emissions
CO2 Emissions
Interest Group Pressure
Significant
Geophysical
Economic Growth
Significant
Economic Structure
Significant
Previous Climate Change
Policy Decisions
Significant
Significant
Significant
Conclusions
• Results suggest that Kyoto targets and
emissions best explained by expectations of
future economic growth (or lack thereof)
– Those countries that could more easily agree to strict targets did
so.
– Those who could more easily chose stricter targets, more easily
reduced emissions
– This may suggest that compliance with the Kyoto Protocol is a
by-product of changes in national emissions, rather than the
goal.
• Interest group lobbying has been mentioned
frequently in policy discussions
– Lobbying is likely occurring, but these results suggest not
dominant influence
Future research
• First commitment period (2008-2012) hasn’t
even started. Some countries may have
significantly different level of emissions by 2012.
• Some approximations could be improved
– ENGO pressure proxied by number of ENGOs/caput
– Actual membership or donation per caput would be better
• Are other international environmental
agreements more symbolic than substantive?
Thank you. Any questions?