Do voluntary international environmental agreements work?

We consider the effects of international environmental agreements using the 1988 Sofia Protocol on the reduction of nitrogen oxides. Panel data on 23 European countries for the period 1985-96 is used to evaluate the impact on emissions by dividing countries into participants and non-participants: that is, those that did and those that did not ratify the Sofia Protocol. Using a difference in difference estimator and controlling for country-specific variables, we find that signing the treaty had a significant positive impact on emission reduction. The estimated yearly reduction in emissions is approximately 2.1% greater than it would have been without the Sofia Protocol.