On the quality of compliance mechanisms in the Kyoto Protocol

In this paper we evaluate the compliance mechanisms in the Kyoto Protocol as agreed at the seventh Conference of Parties to the United Nations Framework Convention on Climate Change (UNFCCC) in Marrakech. We differ from the literature since we concentrate on the complete set of compliance rules agreed in Marrakech and, as a new element, we systematically discuss these compliance incentives in conjunction with the implicit compliance incentives: reputation protection, emission trading and banking. We conclude that effectiveness and efficiency go hand in hand for all explicit and implicit compliance incentives except one—emission trading. Trading improves efficiency but this can also occur at the cost of increasing non-compliance.