Do PTAs with Environmental Provisions Reduce GHG Emissions? Distinguishing the Role of Climate-Related Provisions

This paper assesses the effectiveness of the environmental-related commitments contained in preferential trade agreements (PTAs) on climate change mitigation. A novel and detailed database identifying nearly 300 different types of environmental provisions from more than 680 PTAs since 1947 allows us to distinguish the PTAs with climate-related provisions (PTAwCP) from those with provisions related to other environmental issues. Using panel data covering 165 countries over the period 1995 to 2012, controlling for endogeneity issues, our main result shows that PTAwCP statistically reduce the emissions while the effect of PTAs with provisions related to other environmental issues remains negative but does not significantly affect GHG emissions. Our results suggest that it is rather the specific climate-related provisions in PTAwEP that reduce emissions (carbon dioxide, methane and nitrous oxide). Thus, to be effective in terms of mitigating climate change, PTAwEP should contain climate-related commitments.