The Effect of Kyoto Emission Targets on Domestic CO2 Emissions: A Synthetic Control Approach

We use recent developments in the empirics of comparative case studies to analyze the effect of binding emission targets under the Kyoto Protocol on the development of CO2 emissions of seven major Annex B countries. In particular, we investigate whether committing to a specific greenhouse gas emissions target had an effect on actual CO2 emissions of Australia, Canada, France, Germany, Great Britain, Italy and Japan by using a synthetic control approach. With the exception of Great Britain, we are not able to reject the hypothesis that there has been no effect of binding emission targets on actual emissions.Climate Policy; International Environmental Agreements; Kyoto Protocol; Synthetic Control Method

The dynamics of short- and long-term CDS-spreads of banks

This paper studies 'Stylised Facts' and 'Determinants' of short-and long-term CDS-spreads of banks. As short-term spreads we choose 6M-, as long-term spreads we choose 5Y-spreads. In the section 'Stylised Facts' we found that the correlation between short-and long-term spreads for the total period is high (97%). However, the correlation in sub-periods varies across all possible correlations. Particularly, spreads can have negative correlation. In contrast to [Covitz and Downing, 2007], we find high positive (Covitz/Downing: high negative) correlation for turbulent market circumstances. In the section 'Deteminants' we confirm the Merton-factors (stock price, stock price volatility, interest rate level) for the 5Y-segment, but not for the 6M-segment. Furthermore, we do not find any empirical support that short-term spreads are particularly sensitive to illiquidity factors. In that sense, we also contrast [Covitz and Downing, 2007]. --Liquidity,insolvency,banks

Income shocks and social unrest: theory and evidence

Combining theoretical and empirical work, this paper explores the impact of economic shocks on the incidence of social unrest (i.e., mass demonstrations and violent riots) in autocracies. Our theory predicts negative economic shocks to boost unrest since-in bad times-fighting the regime to reduce the level of resource diversion becomes cheaper. Using a new dataset on political instability in Africa, our empirical analysis confirms this prediction. The instrumental variables estimates-which take into account the potential endogeneity of economic shocks-suggest a significant increase in the level of social unrest as a response to a decline in real per capita GDP.Conflict, social unrest, economic shocks

Climate (Change) and Conflict: Resolving a Puzzle of Association and Causation

There is an ongoing discussion especially among political scientists and economists whether and how climate variability affects civil conflicts and wars in developing countries. Given the predicted climatic changes, several studies argue that increasing temperatures or decreasing precipitation will lead to more conflicts in the future. This paper aims at linking the different strands of the literature by analyzing the causal mechanisms at work. We use short-term weather variability as well as long-term changes in Sub-Saharan Africa and find that climate (change) significantly affects agricultural output, to some extent also GDP, and has no robust direct effects on civil wars. Negative shocks in GDP, however, have the expected fostering effects on civil conflicts

The political economy of the environmental criminal justice system: a production function approach

The criminal justice system combines at least three distinct institutions, police, prosecutors, and courts, in order to enforce key regulations. Focusing on criminal environmental law contained in the German Penal Code, this paper empirically studies the determinants of enforcement decisions at the levels of the police, prosecutors, and judges using a production function approach. We focus particularly on the role of economic and political factors and their comparison across institutions. The results of the panel data analysis show evidence for the presence of economic factors determining behavior at all levels. Political factors impact especially on police and court behavio

The Economics of Environmental Crime : Theoretical Aspects and Econometric Investigations

The present thesis extends the economic literature on the enforcement of environmental regulations by empirically analysing the effectiveness of environmental criminal law. It is a shortcoming of the discussion on the merits of criminal sanctions for environmental offenses that the empirical evidence on their effectiveness has so far not been systematically examined. This contrasts with the case of administrative sanctions for which a rich literature is available. Furthermore and despite the obvious parallels with the types of criminal behaviour studied using the so-called 'economic model of crime', the theoretical and empirical economic literature on crime has also largely by-passed the area of environmental crime. Little is therefore known regarding the extent to which the 'calculus of deterrence' postulated by Becker is operational in the context of environmental crimes. The thesis consists of four parts. The first part is dedicated to a comprehensive literature review on the empirical evidence of the effectiveness of both administrative sanctions in environmental law and criminal sanctions in general law. The second part then analyses the deterrent hypothesis by means of the German environmental criminal code in a dynamic panel data context. Special attention is given to the problem of potentially substantial dark figures in the context of environmental crime. The results derived add in significant ways to the existing literature. The first new insight is that while a substantial part of the German legal literature characterizes the German environmental criminal code as ineffective and therefore redundant, the results indicate otherwise. While rarely used, enforcement instruments restricted to criminal sanctioning such as trial in a public court and prison rates have a substantial statistical effect on reported environmental crime rates. With a view to validating the economic theory of crime, there is clear evidence that the "calculus of deterrence" is indeed operational in the domain of environmental crime. The second insight is the importance of detection and reporting effort for understanding the variation in reported environmental crime. The third part empirically investigates the most common type of environmental crime in Germany, namely illegal waste disposal. Using panel data at the county level of Baden-Württemberg, this part of the thesis has two primary objectives. First, it provides a verification of the results obtained in part two with respect to the deterrence effects. The second objective is to identify further key factors that influence the amount of environmental crime and that go beyond the basic deterrence framework. Examples include structural, economic and political economy variables. Results are threefold. First, there is clear evidence that the deterrence effects found in the state-wide analysis carry over to the counties of Baden-Württemberg. Especially the fact of being tried in a public court again deters people from committing environmental crimes. Second, the analysis supports previous findings on the importance of structural and economic factors that influence illegal behaviour in general. Third, this part reveals new and more subtle political economy factors that play an important role in this setting. The fourth part of the thesis reverses the focus by testing whether the success of different institutions involved in the enforcement process is subject to political control or public pressure. The extent to which exterior political factors or public preferences influence the behaviour of police, prosecutions or courts is only incompletely examined in the literature. However, this question is of fundamental importance as enforcement institutions jointly determine the effectiveness of every monitoring and enforcement regime. Findings show that economic factors including opportunity cost arguments matter at all stages of enforcement. Moreover, it turns out that political economy variables influence the behaviour of police, prosecution and courts. In contrast to initial hypothesis, the degree of influence remains fairly constant at all stages of enforcement. The present thesis therefore extends both the economic literature on the enforcement of environmental regulations and the general economics of crime literature by empirically analyzing the effectiveness of environmental criminal law. The derived results contribute in a significant way to a better understanding of the functioning of criminal enforcement in the context of environmental law. It is able to close the gap in the existing literature and to provide necessary information for policy-makers in the US, UK and within the European Commission discussing whether to further strengthen or weaken the use of criminal law in this context

Analysing the Effectiveness of International Environmental Policies:The Case of the Kyoto Protocol

We study the effectiveness of emission targets under the Kyoto Protocol with respect to reducing CO2 emissions. Using country-level and US state-level panel data and employing the synthetic control method, we do not find a significant effect for any of the major emitters among the Annex B countries with binding emission targets. We also show that – in general – evaluating the effectiveness of international environmental policies at the country level comes with a number of empirical challenges that may invalidate findings based on more traditional panel data approaches