Abstract

At the end of 2012 the commitments under the Kyoto Protocol will expire. As is well known, a majority of countries will not meet their emissions reduction targets, and the agreement has failed to produce significant changes in norms with respect to emissions reduction. Many argue that Kyoto’s failure is due to deficiencies in the structure of the agreement, such as the exemption of developing countries from reductions requirements, or the lack of an effective emissions trading scheme. Using a game theoretic framework and evidence on pollution emission trends between 1990–2010, this paper suggests that structural imperfections are symptoms of a deeper problem of collective action. The paper demonstrates that while pollution reductions may be beneficial for global society in the long run, states will only choose to abate pollution if the short-term net benefit of abatement is positive from a national perspective. In most cases, the benefits of abatement are diffuse and only realized in the long term, while the costs are concentrated and incurred in the short term. Because of this, most Annex I countries have chosen to not comply with Kyoto commitments. The paper concludes that until the collective action problem is overcome, structural adjustments in future agreements—such as the inclusion of developing countries or the creation of an emissions trading scheme—will have little effect on pollution emission reductions. Given the findings, perhaps initiatives that give countries a positive incentive to reduce emissions offer a better way to transition the world to a low carbon economy.

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Additional Information

ISSN
1945-4724
Print ISSN
1945-4716
Pages
pp. 183-196
Launched on MUSE
2012-12-23
Open Access
No
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