A Side Note- International Environmental Agreements

Water is a global common, the management of which may require the implementation of International Environmental Agreements (IEAs).  For example, conflict between, China, India and Bangladesh over the presence of Chinese dams in the Yarlung Zangbo river of Tibet,

not far upstream from where it passes into India and eventually Bangladesh as the Brahmaputra, are ongoing.  China is the source of 10 major rivers flowing to 11 countries and is also the world's foremost builder of hydropower dams. Naturally, China’s neighbors fear that it may exploit its power. Issues such as this can be effectively overcome by the employment of IEAs.  Thus it is important to further understand exactly what IEAs are and look into what makes them successful. 

Comparing and contrasting two famous IEAs (Kyoto and Montreal) may help us to establish whether IEAs can be successful and under what conditions they are effective. 

Montreal Protocol-

Implemented in 1987, the Montreal protocol was designed for the regulation of CFC’s that lead to ozone depletion.  Here quantitative emissions limits for industrial, transitional and developing countries were put in place. A scheme in which Industrial countries pay for added costs to developing countries was enforced. Trade sanctions were introduced for non-participants and violators. The Initial protocol was modest, gradually tightening over a 10-year period.

UN Framework Convention on Climate Change-

By contrast to the Montreal protocol the Kyoto protocol (1997) defines mandatory emissions reduction for Annex I (developed) countries that sign up. With a goal of emissions reduction over a 15-year period, in which developed countries are largely exempted. Penalties for non-compliance were not implemented.

Flexibility mechanisms that were introduced for implementation to promote savings include:

·      Emissions trading

·      Joint implementation i.e. industrialized nations could obtain emissions credits from carbon sinks (in their own country or created abroad)

·      Clean development mechanisms e.g. industrialized nations could obtain emissions credits by say constructing efficient power plant in a developing country

Why was Kyoto a failure?

The Kyoto protocol was introduced during the Brazil Earth Summit (1992) however was only finalized in 1997, half way through its 10-year life, making goals somewhat unachievable.  Furthermore, it was signed but never ratified by the US, who are the largest gross emitter and largest emitter per capita of CO2 in the world, without the United States, the treaty cannot be as successful.  One reason the United States refuses to ratify is due to the absence of binding targets for developing nations, without which targets will not be reached- figures show that between 1992 and 2007 the changes in greenhouse emissions are as follows: India+103%, China+150%, US+20%, Russian federation -20%, Japan +11%.  The Kyoto protocol ignored many essential characteristics needed in designing an effective International Environmental Agreement of which most were included in the Montreal protocol. 

What makes Montreal a success?

It is widely thought that the Montreal protocol was one of the most successful treaties ever negotiated and implemented.  With all 142 developing countries able to meet the 100% phase-out mark for CFCs, halons and other ozone depleting substances in 2010. The ozone layer is expected to return to 1980levels between 2045 and 2060 as long as all countries continue to meet their obligations.

Comparison of Montreal and Kyoto Protocols

	Montreal	Kyoto
Developing country reductions?	YES	NO
Permanent?	YES	NO
Emissions trading?	NO	YES
Side payments?	YES	NO
Participant incentives?	YES	NO
Leakage prevention?	YES	NO

So what makes a successful IEA?

Barrett (2004) reviewed over 190 IEAs and drew the following conclusions on creating a successful and effective IEA:

• ·      It is necessary to create an aggregate net benefit to participants, and show that overall gross benefits outweigh overall gross costs.
• ·      To distribute the aggregate gain among participants, for each participant the benefits should outweigh the costs.
• ·      Allowing extra “side-payments” if parties differ makes participating worthwhile for everyone. 
• ·      To allow the distribution of benefits of cooperation to take many forms, for example direct cash transfers, and trade schemes etc.
• ·      To provide incentives for abatement cost savings, as international solutions would most likely be highly costly to implement in terms of enforcement and monitoring.
• ·      Market mechanisms including emissions fees, trading emission fees, trading schemes can promote cost savings and give incentives for R&D investment.
• ·      Emissions trading
• ·      Joint implementation i.e. industrialized nations could obtain emissions credits from carbon sinks (in their own country or created abroad
•  
• ·      Clean development mechanisms e.g. industrialized nations could obtain emissions credits by say constructing efficient power plant in a developing country.

Furthermore, Sandler (2004) found that international collective action was more likely to succeed where:

•     There was sufficient mutual self-interest
•    In response to recognition of a shared threat for example increased co-operation on counter-terrorism in the immediate aftermath of 9/11.
•     Where there was leadership by a dominant nation for example the role of the USA in securing agreement to protect the ozone layer.

With this in mind, my next post will look at the recent Budapest Water Summit, and aim to evaluate it’s success as an IEA., as well as looking into it’s policies.