Understanding Participation and Compliance in the Kyoto Protocol: A Game Theoretic Approach

Sammanfattning: Climate change resulting from greenhouse gas emissions is one of the most important challenges of our time. The Kyoto Protocol is considered an important step towards achieving international collaboration over the climate. Participation in the protocol can be modeled as a game in two stages: first, the participation decision and then, the emission reduction outcome. Actors are assumed to take the positive externality of emissions reductions from other parties, spillins, into account when making choices in both stages. This model was first introduced by Murdoch, et al. (2003) and applied to the Helsinki Protocol. We use this framework and adjust it to fit the mechanisms of the Kyoto Protocol. The Helsinki Protocol concerns Sulphur emissions, a regional public good while the Kyoto Protocol concerns greenhouse gas emissions, a global public good. When taking this difference into account, our results show that the model is not applicable to the Kyoto Protocol. This is due to the construction of the spillins mechanism, which becomes endogenous in global public good problems. This has further implications for understanding participation and compliance within the Kyoto Protocol. Although the protocol has made little quantifiable progress, it may have paved the way for future international collaboration on climate change. In particular, some of its mechanisms may have encouraged participation, facilitated future internalization of the positive externality and set up important institutions.