Research / BFI Working PaperNov 15, 2023

Does the World Free Ride on US Pledges to Reduce Greenhouse Gas Emissions? Evidence from the Paris Climate Agreement

Trevor Houser, Kate Larsen, Michael Greenstone

The US is widely believed to play a pivotal role in the development of international agreements to reduce greenhouse gas emissions, but do other countries free ride on US pledges? This paper provides what we believe is the first empirical evidence by proposing the US Climate Reciprocity Ratio (CRR); this summary statistic is the ratio of the rest of the world’s pledged reductions to the US’ pledged 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 leading “business as usual” projections of their emissions at the time of their pledges (e.g., from the International Energy Administration). Using these pledged reductions, there are two main findings: 1) pledged emissions reductions under the Paris Agreement, if successfully achieved, would reduce global net GHG emissions by 12% – 24% in 2030 and by 38% – 54% in 2050; and 2) the estimated CRR ranges from 2.5 to 10.8, with the upper end of the range applying to the middle of the century when the US’ share of global emissions has declined. Although pledges are not the same as reductions, these findings suggest that US climate policy can have indirect benefits by unlocking pledged reductions in other countries that benefit the US.

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