On the causal effect of climate policies on the reduction of carbon dioxide emissions

Details

Supervisors

Hasse, Jean-Baptiste

Faculty

Louvain School of Management

Degree label

Master [60] en sciences de gestion (horaire décalé)

Abstract

Given the severe climate change that Earth is facing and the adoption of national and international climate policies to mitigate it, this master thesis aims to determine whether the domestic carbon taxes, the Kyoto Protocol and the European Union (EU) emissions trading system (ETS) have had an impact on the carbon dioxide emission reduction from their entry into force to the present day. To that end, an empirical analysis is carried out on three Nordic countries, namely Finland, Norway and Denmark, based on unconditional and conditional Granger causality tests in frequency domain. It demonstrates the effectiveness in the long run of the carbon tax for the three countries. The Kyoto Protocol is also proved to impact Norwegian and Danish carbon emissions whereas a long-term causal relationship of the EU ETS on those of Finland and Denmark is detected. This preliminary econometric investigation could assist policy-makers in defining future climate policies to reduce greenhouse gas emissions and therefore to reach the Paris Agreement objectives.