The price of non-compliance with the Kyoto Protocol: The remarkable case of Norway
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One of the ways to induce compliance is for an international enforcement mechanism to authorize the use of punitive consequences against a non-compliant country. However, such consequences should not cause significant damage to other (compliant) countries. The compliance mechanism of the Kyoto Protocol fails to meet this requirement. The Enforcement Branch of the Compliance Committee is instructed to impose punitive consequences on a non-compliant country that will have considerable adverse welfare effects for compliant countries as well. Using a numerical model, we show that in the case of Norway, the welfare effects can actually be worse if another country is punished than if Norway itself is punished.
KeywordsCompliance enforcement General equilibrium modelling International institutions Kyoto Protocol Punitive consequences
We are indebted to Scott Barrett, Gunnar Eskeland, Cathrine Hagem, Fred Menz, Tora Skodvin and two anonymous reviewers for helpful comments.
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