The US is widely believed to play an important role in developing international agreements to reduce greenhouse gas emissions, but will other countries free ride on US pledges? This paper, published on SSRN, provides what we believe to be the first empirical evidence by proposing the US Climate Reciprocity Ratio (CRR); this summary statistic is the ratio of the world’s remaining promised reductions to the US’s promised reductions through international climate negotiations. The analysis begins by quantifying countries’ Nationally Determined Contributions (NDCs) and Net Zero targets under the Paris Agreement by taking the difference between their pledges and prioritizing the “business as usual” projection of their emissions during their pledges (eg, from the International Energy Administration). Using these promised reductions, there are two main findings: 1) promised emission reductions under the Paris Agreement, if successfully achieved, will reduce global net GHG emissions by 12% – 24% by 2030 and by 38% – 54% by 2050; and 2) the estimated CRR ranges from 2.5 to 10.8, with the high end of the range applicable at mid-century when the US share of global emissions declines. Although pledges are not the same as reductions, these findings suggest that US climate policy may have indirect benefits by unlocking promised reductions in other countries that benefit the US.
Climate change is the ultimate collective action problem. The benefits of reducing greenhouse gas emissions (GHGs) in the United States have the same impact on the US climate as reducing emissions in India, and vice versa. However, the costs of reducing emissions are concentrated in the country where the reductions occur. Thus, in a vacuum, each country would prefer to benefit from the other’s emission reductions and allow them to disproportionately shoulder the costs. This static view of the climate problem makes it seem intractable in the face of the annual release of 50 billion metric tons of CO2e in GHGs coming from nearly 200 countries in the world. In fact, this is one of the reasons why climate change is called by some “the problem from hell”.
The United Nations and other international organizations are trying to solve this problem through multilateral agreements in which countries agree in principle to cut emissions more than they would do alone, but the extent to which This method has not been successfully tested quantitatively. Indeed, concern about whether US participation in such agreements can be met with sufficiently inclusive participation by other countries has historically limited US engagement. However, the last decade has seen the arrival of two new international climate change agreements with a more extensive commitment to reducing emissions than previous agreements: the 2015 Paris Agreement under the UN Framework Convention on Climate Change (UNFCCC), and the 2016 Kigali Amendment to the Montreal Protocol. At least partially because of the broad participation in both agreements, the US is a party to both.
This paper provides an empirical test of whether international climate agreements facilitate the reduction of emissions, relative to a world that has not adopted them, by examining the Paris Agreement where countries collectively agreed to reduce their GHG emissions. It is widely believed that the United States played a special, or even essential, role in the formulation and adoption of these agreements such that they would be less ambitious or perhaps even non-existent without US participation; This role is a function of the vast global influence of the US due to various factors (for example, its historical role in multilateral institutions and negotiations, GDP, and military strength) and its high share in the present and historical emissions. So we further count how many tons of GHG emissions reductions have been made in the US under the Paris Agreements and others around the world that have been reduced to benefit the United States. As part of the analysis, we introduced the “Climate Reciprocity Ratio” (CRR), which is the ratio of the rest of the committed reductions in the world to the reductions made in the US.
Reductions in emissions due to the Paris Agreement are calculated by comparing projected emissions under the Nationally Determined Contributions (NDCs) of countries to an independent Pre-Paris Agreement emissions projection baseline or counterfactual. We use the report of the International Energy Agency (IEA) 2014 World Energy Outlook (WEO) which was released on November 12, 2014 and projects emissions until 2030 at the country level as a counterfactual for emissions. Importantly, this projection is the most authoritative and widely referenced expectation of future energy trends. At the time of publication of each edition, it shows the current state of technology (for example, the price of wind, solar, natural gas, etc.), a main expectation of the future path of technology, all adopted policies, and consensus macroeconomic expectations. Regarding the 2014 publication, it does not claim any GHG reduction due to the Paris Climate Conference. Importantly, it was coincidentally published on the same day that the US and China announced their NDCs which prompted other countries to release their NDCs throughout the remainder of 2014 and through the Paris Conference at the end of 2015. Consequently, we assume that the NDCs are based on the same assumptions about expected emissions that underlie the IEA report. In addition to this comparison, we conducted similar exercises for the next actions of the UNFCCC where countries update their Paris Agreement NDCs in 2020-21 and make 2050 net zero.
There are two main results. First, the Paris Agreement has been very successful in delivering achievable emission reductions, relative to existing projections of emission trajectories before the commitments were made. Specifically, our analysis suggests that the promised emission reductions under the Paris Agreement, if successfully achieved, would reduce global net GHG emissions by 12 – 24% by 2030 and by 38 – 54% by 2050. Using suggested by the US Government’s updated SCC, the 12 percent reduction in 2030 by itself would reduce climate damage by almost $1.5 trillion.
Second, we estimate that the CRR in the US is very large. For example, the analysis puts it at 3.9 tons in 2030 under the initial Paris Agreement NDCs and 2.5 to 3.0 tons in 2030 under the updated Paris Agreement NDCs. In addition, the CRR in the US grew in the latter half of the century we estimate from 7.0 to 10.8 tons in 2050. The growth shows that the US share of global emissions has decreased throughout the century and the rest of the world has made and meaningfully higher commitments. under the Paris Agreement.
We emphasize that these calculations are based on planned, rather than actual, emission reductions and that the analyzed commitments are voluntary. Regarding the former, we think that the assessment of realized emissions is a less convincing method to estimate the effects of multilateral negotiations because it necessarily confuses the promises of unexpected technological changes, macroeconomic development, etc., which highlight the challenges of developing a reliability. counterfactual. Regarding voluntary commitments, we note that they are common in international agreements of all kinds.
The remainder of this paper is organized as follows. Section 2 provides background on the Paris Agreement. Section 3 provides an overview of the data and Section 4 the methods used to calculate the CRR for the United States under that agreement. Section 5 describes the results of the analysis and Section 6 interprets the results and concludes the paper.
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