Chapter 21: The Economics of Global Agreement Flashcards
What are the “answers” to the four economic questions?
How much Pollution is too much?
Considered efficiency (cost-benefit), safety, and sustainability standards
(safety and sustainability first cost-benefit too narrow argue reduction in pollution regardless cost)
Is government up to the job?
Has (1) imperfect info and (2) influenced by environmentalists and industry
How can we do better?
Require smarter reguation and shift in government focus to promote CT
Can we resolve global issues?
(1) alleviating poverty, (2) slowing population growth, and (3) promotion/diffusion of sustainable/clean tech
Need coordinated international action through effective international ag
- Agreements on Public Good
Effective agreement → likely unsuccessful because burden sharing is difficult achieve
Requires each country contribute true WTP for agreemnnt (differ between countries)
- Imperfect info → hard determine true WTP (result in understatement: free-riding)
- result: agreements too weak (are unenforceable and incentive cheating and non-compliance)
- Monitoring and Enforcement
- Overcome unenforceablility and non-compliance problem, most international agreements create intergovernmental organisations (IGOs) to address this
- IGOs often equipped issue only monitoring nonbidining standards
Effective Enforcement Requires:
- Social pressure,
- Targeted sancations
- Restricted access to funds for cheaters and non-complaint participants
Sometimes threat of applying these tools is as effective as actually apply them
Ozone Layer and Biodiversity
Montreal Protocol
Montreal Protocol: Global phaseout of CFCs to protects ozone layer
Success:
- Clear and present danger positive harm from depleted ozone layer
- Narrlowly defined problem
- Ease of enforcement due limited number participants
Ozone Layer and Biodiversity
Rio Convention on Biodiversity
Rio Convention on Biodiversity: protect biodiversity by encouraging partipants to list inventory reserves; take conservation measures and provide host countries with share pharmaceutical and agricultural benefit profit
Not successful:
- Clear & distint danger of negative harm
- Broadly defined problem
- Inability take action without funding from rich countries
How does stopping global warming relate to the Monreal Protocol and Rio Convention?
In theory …
- Similar elements to Montreal Protocal
(1) Clear danger of positive harm
(2) Narrowly defined problem
- Similar elements to Rio Convention(1) Too many particiants(2) Need global warming agreement to confront sustainability issues
Successful Agreement Requires:
- Ambitious numerical emission reduction target for CO2 and methane
- Mechanism for rich countries to transfer technology and resources to poor countries to finance sustainable development
- Strong enforcement mechanism
Overcome free-riding and non-compliance
Coalition of willing could create climate clubs impose tariffs on imported goods and services from outside coalition
How to Overcome free-riding and non-compliance:
Overcome free-riding and non-compliance
Coalition of willing could create climate clubs impose tariffs on imported goods and services from outside coalition
Reality of Global Warming Conventions:
1992 Rio Convention called voluntary efforts prevent growth in emissions
- Failed because agreement cannot be voluntary
1997 Kyoto Protocol not enforced outside Europe despite signature of other countries (Canada, Australia, Japan - not US)
2009 Copenhagen Conference failed reach agreement - major nations (US, Europe, Japan, and China) adopted UN-sponsored target max warning 2°C above pre-industrial levels
- Failed - participation voluntary without even formal agreement
2015 Paris Accord first agreement which all countries agreed concrete steps limit global warming to 3°C + promise follow up deeper cuts
- Trump withdraw US (2017) and Covid-19 prevent other meetings
