The international protocols have good impact in saving the environment.
It helps raise awareness to the different nations and people on the
current status of the environment and its implication in the coming
years to come. It also influences the birth of a lot of programs that
aims to take care of the environment.
We find that, in the absence of the Protocol, CFC production (and hence
emissions) would have increased by a factor of three over the next fifty
years. This study also supplements existing environmental Kuznets curve
analyses by providing estimates for the unilateral management for a
global externality. In this manner we are able to assess the
distributive impacts of the Protocol, in addition to its effectiveness.
There has been a recent economic literature arguing that international
environmental agreements (IEAs) can have no real effect, on account of
their voluntary and self-enforcing nature. This literature concludes
that the terms of IEAs are the codification of the noncooperative
equilibrium, and recent empirical work has supported this conclusion in
the context of the Montreal Protocol. This paper reaches the opposite
conclusion, by means of the comparison of the CFC emissions implicit
within the cooperative and noncooperative management paths. The
cooperative path is implicit within the terms of the Montreal Protocol.
The noncooperative path is implicit in countries’ behaviour during the
period of unilateral management of CFC emissions. This study estimates
the relationship between countries’ propensities to produce CFCs and
income per capita over the period 1976-1988 (prior to the entry into
force of the Montreal Protocol). It then extrapolates this path of
unilateral management beyond 1988, and compares it to the obligations
adopted under the cooperative regime. This comparison of the projected
noncooperative path with the obligations adopted under the Montreal
Protocol allows a qualitative test of theories on the economic
foundations of self-enforcing IEAs.
Using dynamic estimation methods on a panel of around 30 countries over
13 years, the turning point in the relationship between CFC production
and income is found to lie around (1986) US$16,000. This implies that
developing countries bear the greatest costs in the implementation of
the Montreal Protocol.