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«EUI Working Papers RSCAS 2012/23 ROBERT SCHUMAN CENTRE FOR ADVANCED STUDIES Global Governance Programme-18 MULTILEVEL GOVERNANCE OF INTERDEPENDENT ...»

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A Lean and Consolidated Organizational Structure A fresh start in global environmental governance would offer a way to rationalize the existing mass of confusing international entities and jurisdictional overlaps. A GEO could be fashioned from the consolidation or elimination of the existing international bodies that have some jurisdiction over the environment including UNEP, WMO, the CSD, and all of the existing environmental treaty secretariats. Modelled on the concept of “networked governance” (Slaughter, 2004, expounding on the concept of networked international governance; ‘Program on Networked Governance’, 2012), a GEO would offer a faster, problem-oriented entity with access to state of the art knowledge, and simultaneous proximity to decision-makers at the international, national, state/provincial, and city scales (Esty and Ivanova, 2002, p.197). It might also provide a compliance mechanism designed to track transboundary environmental harms and member states adherence to treaty commitments. Such a monitoring mechanism would function better if reinforced by the WTO. This new structure would make it possible to strengthen the overall coherence of international environmental governance by taking advantage of a coordinated approach to the range of existing environmental treaties and programs – minimizing potential or actual conflicts (Asselt, 2007, p.2). A GEO should be lean, flexible, and focused on the specific challenges presented by international environmental problems drawing on expertise from governments at all levels.

A GEO Could Help Narrow the “Values Divide” A GEO could also help to bridge the gap with regards to burden-sharing and the “values divide.” A GEO would not only provide a mechanism for bargaining, but could also offer a forum for data collection and analysis, information exchange, policy benchmarking, identification of best practices, technology transfer, and dispute resolution functions (Esty and Ivanova, 2003). A GEO would enhance environmental policy cooperation by permitting jurisdictions to draw on each other's experiences, technologies, and training programs. High quality data with cross-country comparability is necessary to support an effective policy response – supporting efforts to define the scope of the problem, assess policy options, and evaluate the results of emissions control programs. Reduced technology and information gaps between nations might well narrow the values divide and facilitate agreements on policy instruments. The UNFCC conventions have been conspicuously devoid of real efforts to provide an adequate forum and incentives for technology transfer between nations; a GEO would provide such a forum along with a structured process and incentives for technology transfers. To ensure that there is effective technology to exchange, a GEO would also help to create financing instruments for the development of innovative low-carbon technologies.

Furthermore, a GEO would provide a policy formation space that would facilitate coordination of regulatory policies so as to avoid a competitiveness-driven race toward the bottom. Such a collaborative process would also allow for some convergence of environmental standards across countries at similar levels of development – broadening the marketplace for clean energy solutions.

In addition to bridging gaps in technology and regulatory policy, a GEO could provide a mechanism to manage financial assistance to developing nations. Financial support is an essential element of any “global bargain” that might garner the support of nations with limited resources, many of whom feel that the “polluter-pays” principle argues for industrialized nations contributing more funds to climate change mitigation. A financial transfer instrument has become even more critical with

Daniel Esty and Anthony Moffa

the recent global recession as many nations now fear that the policy instruments necessary to respond to climate change will chill economic recovery. Without a straightforward and streamlined formula and mechanism for financial transfers, the burden-sharing problem will continue to weigh down any effort to advance a global response to climate change.

A GEO could Mitigate the Difficulties of Coordinating a Large Group Because of the global nature of the climate change problem and the necessarily comprehensive nature of any meaningful solution, coordination across many nations will be needed for policy success. But not everyone needs to be part of the negotiations or the administration of an agreed-upon policy response. The goal should be to craft a functioning regime that can respond systematically and coherently to the global collective action problem. A GEO might help with this task through several institutional design elements. First, a small and efficient organization – perhaps even a “virtual” organization in many respects – could be tightly focused on handling just the global-scale aspects of climate change. This “light” structure of global governance would need to leverage the capacities of national governments as well as provincial/state, regional, and local governments (Daniel C. Esty, 1999b). It would also be useful to draw on business, civil society, academic research, and community organizations.

Second, a GEO could serve as a forum for negotiations on rulemaking as well as coordination on strategy implementation. With a “pivotal states” Executive Committee guiding the collaboration, a GEO might avoid the stasis associated with reaching consensus among almost 200 nations on every minute detail of the international climate change policy agenda.





Finally, a GEO might provide a mechanism not only to support policy implementation on an international scale but also capacity building and policy coordination at the national and sub-national levels. Such a multi-tiered structure would make it easier to tailor policy instruments to local circumstances, traditions, risk preferences, and values. “Networked governance” and mechanisms to draw on the expertise and strengths of local organizations offers the prospect of a leaner and more efficient institutional structure better positioned to deliver on-the-ground-results.

A GEO Presents a Leadership Opportunity for the United States Getting the world’s climate change process out of the Kyoto Protocol framework and into a new forum would provide a graceful way for the United States to move from being disengaged back into a leadership role. As noted above, the prospects for real action to control greenhouse gas emissions, enhance carbon sinks, and invest in appropriate adaptation in vulnerable places around the world will remain low until the United States reasserts itself in the process. While the push to reinvigorate global environmental policy cooperation through a GEO would not itself guarantee U.S. engagement on climate change, it would make it easier for a U.S. Administration to come back into a leadership position.

Climate Change and Trade – Why Separate but Coordinated Regimes are Necessary The recognized need for discipline on free-riders and a mechanism for enforcing international environmental obligations has led a number of commentators to look to the trading system for institutional muscle (Doelle, 2004; Esty, 1994b). While trade experts worry that the trade regime is itself fragile (highlighting the lack of success of the Doha Round) (Wolfe, 2007; contra Martin and Messerlin, 2007, arguing that it is not the trade system itself, but rather external factors that have made recent negotiations less fruitful), and that any attempt to enforce climate change commitments through Why Climate Change Collective Action has Failed and What Needs to be Done within and without the Trade Regime trade penalties will further weaken the WTO, the environmental world perceives the WTO as a venerable institutional success with dispute settlement procedures that deliver real results.

There exists, however, an undeniable link between trade and the environment – and a need to have those who are the beneficiaries of open world markets bear a share of responsibility for the burden of responding to global-scale environmental threats (Esty, 2001). Interdependence requires recognition of responsibilities as well as rights.

While economic integration is a policy choice, ecological interdependence is not. It is a physical fact that must be managed – or the world risks suboptimal outcomes from free trade including an increasing threat of climate change. The call to keep trade and environmental policymaking on separate tracks is not just normatively inadvisable; it is practically impossible.

As trade expands and the bonds of globalization thicken, the future of trade liberalization cannot be disentangled from transboundary environmental challenges in general and climate change in particular. Ignoring the environmental impacts of expanded trade poses not just a risk of ecological degradation but also a backlash against further economic integration. So the WTO must act to reinforce the global response to climate change not just out of some sense of social responsibility, but out of self-preservation. Successful management of ecological interdependence requires policy coordination at the global scale and action undertaken at more decentralized levels by governmental authorities with operational control over those responsible for emissions, capable of enhancing sinks, and positioned to mitigate harms.

The case for a GEO emerges from theory and practice. The matching principle (Butler and Macey,

1996) argues for policy collaboration at the scale of the harm to be addressed. In the case of climate change, this means worldwide. Thus, the need for an overarching global-scale action plan suggests that a Global Environmental Organization of some kind must be established. But in practical terms, those positioned to reshape the behaviour of the actual emitters – factories, farmers, vehicle drivers, etc. – must have operational control. Thus, the logic of multi-scale governance becomes overwhelming. The WTO, although a crucial player in the environmental regime, cannot be expected to do all the heavy-lifting. Coordinated and complimentary WTO and GEO institutions would bring environmental governance to fore of international policymaking and go a long way towards making environmental commitments real, as opposed to merely aspirational rhetoric.

Conclusion Climate change must be understood as an economic as well as an environmental issue – requiring “governance” in both an economic (WTO) and environmental (GEO) context to avoid market failures and ecological peril. The pervasive weakness of the UN Environment Programme and other existing international environmental bodies argues for a reconfiguration of the current global environmental regime – and the creation of a Global Environmental Organization. Success of any reengineered environmental regime, including a new GEO, would necessarily depend on cooperation with governmental entities at more disaggregated levels. Thus, progress in addressing climate change will require both horizontal and vertical investments in improved environmental governance. The world needs a GEO as a counterpart – and counterbalance – to the WTO. But it also needs multi-tier environmental policymaking so as to achieve operational success.

Daniel Esty and Anthony Moffa

References Ahearn, R. J. (2009) 'The global economic downturn and protectionism', in 2009 Alter, K. J. & Meunier, S. (2009) The politics of international regime complexity. Perspectives on Politics. 7 (1), 13–24.

Asselt, H. Van (2007) Dealing with the Fragmentation of Global Climate Governance. Legal and Political Approaches in Interplay Management. Global Governance Working Paper No. 2007/30.

[online]. Available from: http://www.glogov.org/images/doc/WP30.pdf.

Barrett, S. & Stavins, R. (2003) Increasing participation and compliance in international climate change agreements. International Environmental Agreements: Politics, Law and Economics. 3 (4), 349–376.

Butler, Henry N. & Macey, Jonathan R. (1996) Externalities and the Matching Principle: The Case for Reallocating Environmental Regulatory Authority. Yale Law & Policy Review. 14 (2), 23–66.

Buzbee, W. W. (2003) Recognizing the Regulatory Commons: A Theory of Regulatory Gaps. Iowa Law Review. 891.

Charnovitz, S. (2007) The WTO’S environmental progress. Journal of International Economic Law.

10 (3), 685–706.

Charnovitz, S. (2008) 'An Introduction to the Trade and Environment Debate', in Kevin Gallagher (ed.) Handbook on trade and the environment. Cheltenham: Edward Elgar Publishing.

Chayes, A. & Chayes, A. H. (1998) The New Sovereignty: Compliance With International Regulatory Agreements. Harvard University Press.

Conti, F. (2010) Toward a Post-2012 International Climate Agreement.

de la Torre, A. et al. (2009) Low carbon, high growth: Latin American responses to climate change :

an overview. World Bank Publications.

Doelle, M. (2004) Climate Change and the WTO: Opportunities to motivate state action on climate change through the world trade organization. Review of European Community & International Environmental Law. 13 (1), 85–103.

Establishment of an Ad Hoc Working Group on the Durban Platform for Enhanced Action (2011) Draft Decision -/CP.17/2011. [online]. Available from: http://unfccc.int/2860.php.

Esty, Daniel C. (1994a) 'The Case for a Global Environmental Organization', in Peter B. Kenen (ed.) Managing the world economy: fifty years after Bretton Woods. Peterson Institute. p. 287.

Esty, Daniel C. (1994b) Greening the GATT: trade, environment, and the future. Peterson Institute.

Esty, Daniel C. (1996) Stepping up to the global environmental challenge. Fordham Environmental Law. 8103.

Esty, Daniel C. (1999a) 'Pivotal States and the Environment', in Robert Chase et al. (eds.) The pivotal states: a new framework for U.S. policy in the developing world. W.W. Norton.

Esty, Daniel C. (1999b) Toward optimal environmental governance. New York University Law Review. 741495.

Esty, Daniel C. (2001) Bridging the trade-environment divide. The Journal of Economic Perspectives.

15 (3), 113–130.

Why Climate Change Collective Action has Failed and What Needs to be Done within and without the Trade Regime Esty, Daniel C. (2004) Sustainable Management of the Global Natural Commons. February draft.

International Task Force on Global Public Goods, Stockholm.



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