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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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These critiques are difficult to defeat. The Convention's language is indeed hortatory and unspecific, both on its own terms and in comparison with other multilateral agreements. While providing a comprehensive framework on the issue, it lays down almost no straightforward obligations. By becoming party to the CBD, states have accepted only a duty to manage their biodiversity in a sound manner within their sovereign territories, and to care similarly about areas beyond national jurisdictions, but the standards of defining acceptable biodiversity management are non-existent, or stretchable at best. The CBD is essentially another in the line of conservation treaties with broad statements of purpose and objectives, but a lack of express provisions for implementation (Bilderbeek, 1992, p.100). It has been argued that the CBD is doomed to ineffectiveness by giving insufficient means for the realisation of the stated objective of biodiversity conservation, and for failing to address the core causes of biodiversity loss, making the CBD an ‘un-implementable’ and ‘non-compliable’ agreement (Adam, 2010). This is so because protection of biodiversity is one of competing norms in a dense regulatory space. There are many incentives for states to pursue policies, or a development path, which diverts them from the objective of protecting biodiversity (these policies and practices which encourage conduct that leads to the degradation of biodiversity are called ‘perverse incentives’ by the UNEP/CBD, 2006c, Add.1).

The CBD's weakness extends beyond substantive provisions, including also structures for the management of the treaty regime. The CBD's lack of any enforcement provisions renders debates about enforcement almost irrelevant. "[T]here is little of [enforcement] in international law, let alone in international environmental law" (Brunnée, 2005, p.2), and even less so in its subsection of nature protection. There is equally little use in discussing compliance mechanisms in the context of the CBD.

Contrary to most other treaties, the CBD does not contain them. 19 It does contain provisions which aim at inducing compliance, such as technology transfer, capacity building and reporting (CBD, 1992, Article 12, cooperation in research and training; Article 16, access to and transfer of technology to developing countries under fair and favourable terms; Article 18, technical and scientific cooperation in particular with developing countries; Article 26, Reports), but these are not compliance bodies in the service of controlling compliance and facilitating problem-solving (Brunnée, 2005, p.380). Finally, although the CBD contains dispute settlement mechanisms (1992, Article 27 defines negotiation, mediation, arbitration, conciliation (the procedure for these two is described in Annex II), and the submission to the ICJ, as ways of settling a dispute), these have not been used to date. Arguably, this is because the problems of the CBD are much more rudimentary, i.e. such disputes do not even arise.

The second critique is that of an inadequate financing scheme. Financing is one of the fundamental elements of successful environmental governance. It is generally accepted in international environmental law that non-complying parties, and almost all cases of non-compliance, are a consequence of a lack of funding or capacity - which is again related to funding -, see e.g. Brunnée (2005, p.3).

In the context of the CBD, the need for a funding mechanism is well explained as follows:

The issues of compliance with environmental agreements, in particular various institutional structures, have been much debated. Among some of the most visible volumes on the matter, not a single contribution has studied the (noncompliance arrangements under the CBD, which does not say as much about the irrelevance of the CBD as a treaty, but rather about the lack of any such mechanisms in it (see Beyerlin et al., 2006; Cameron et al., 1996; Zaelke et al., 2005;

Treves et al., 2009; A. C. Kiss et al., 2003).

Jerneja Penca

“The Convention [...] was presented as complex set of deals: a deal between North and South, a deal between the public sector and the private sector, a deal between national governments and local communities, and a deal between present and future generations. Deals imply some type of exchange be it in-kind or financial.” (UNEP and IUCN, 1998, p.2) Few alternatives exist to the central problem of the global biodiversity conservation: that of compensation to the local communities for forgoing their immediate benefits from exploiting biological resources, or - more generally -, for making them follow a development route, which prioritises conservation or sustainable use of land over financial gains (McNeely, 1988, p. xiii;

Perrings and Gadgil, 2003; Mullan et al., 2009). At least in the short term, this latter route is seen as less profitable.

It is not that the CBD has ignored the issue of financing. Rules on financial resources are built on the principles of common-but-differentiated-responsibilities (CBD, 1992, Article 20, Paragraph 4), and ‘full incremental costs’ (CBD, 1992, Article 20, Paragraph 2). There are provisions on a financial mechanism and financial resources. The role of the financial mechanism was entrusted to the Global Environmental Facility (GEF), 20 which was supposed to act as a primary economic incentive for the developed countries. The GEF operates on a grant basis, provided to projects in developing countries.





Biodiversity is one of the two issue-areas receiving the vast majority of the GEF's funding, and is seen as a primary source of a greener aid (Hicks, 2008, p.207). Even so, the resources provided through GEF are insufficient, project-tied, and do not match the benefits provided by biodiversity (Menzel, 2005). Apart from insufficient funding, certain aspects of the GEF's governance have been seen as problematic. Initial critiques about the its transparency and accountability have arguably been resolved (Lake, 1998), but a disproportionate influence of developed states (who provide most of the GEF's funding) over the allocation of funds is a lingering problem (Sjöberg, 1999).

As comprehensive as it may be, the CBD's financial model is obsolete. It is built on a rigid notion of the developed North providing aid to the South, a model that is akin to development assistance (Kaul et al., 1999, p.450, at xxiii, identify the ‘Incentive gap’ or the focus on aid mechanisms, rather than many other policy options, as part of three key weaknesses in the current arrangements which impede a better supply of global public goods). Yet, given that biodiversity provides a global benefit, resources provided to supply it should not be seen as ‘aid’ neither by the donor, nor the recipient. The concept of aid is burdened with polarised views of who owes what. The verbalisation of the transaction along the traditional division between the ‘developed’ and ‘developing’ countries further perpetuates the view of opposing ‘camps’, and obscures the CBD's original idea of a shared value. In a joint community that seeks ways of sustaining life, it is increasingly difficult to define which direction of the transaction is about ‘assistance,’ or which party is actually in a greater need of the other party.

Rather than aid, the participation in biodiversity transactions is much closer to self-interest or global interest, if the blurry line between them can be ‘sharpened’ anyway (Cullet, 1999, pp.559–61).

Incentives In essence, insufficient funding is a consequence of inadequate incentives for achieving the goals of the CBD. This section will provide an overview of the existing incentives in the Convention.

The Convention's most obvious built-in incentives are those that emerge from the objectives of the Convention. Although it is commonly assumed in the debates on biodiversity as a public good that the The GEF was created by the World Bank in 1991, that is before the Rio Summit, to provide financing to developing countries in four main areas of environmental degradation, of which biodiversity loss was one. It was at first only a temporary financial mechanism of the CBD, but was later made permanent by a COP Decision (UNEP/CBD, 1996a).

The relationship between the CBD and the GEF is governed by a Memorandum of Understanding, which is part of this decision.

International incentive mechanisms for conservation of biodiversity and ecosystem services proper policy goal is conservation of biodiversity, there are two other objectives: sustainable use of its components, and fair and equitable benefit-sharing, arising out of the utilization of genetic resources (CBD, 1992, Article 1). The CBD sees these objectives as easily reconcilable, and as achievable with synergetic measures in its implementation, both in-situ (in natural environment) and ex-situ (outside it). Over time, the concept of conservation itself has evolved to include a certain level of takings, in other words, the concept of ‘conservation’ in itself now includes some sort of “sustainable use.” (Heijnsbergen, 1997). This has been accepted by the CBD, which sees sustainable use as a tool, or incentive, to promote conservation, and recognises that “sustainable use cannot be achieved without effective conservation measures.” (Secretariat of the Convention on Biological Diversity, 2004a).

Rather than antagonistic, as in the past, the goals of conservation and sustainable use have become seen as synergetic, and this is now widely accepted, with the support of numerous case-studies and policy recommendations.

Built into the Convention is also the goal of benefit-sharing, the purpose of which is to act as an incentive for the local communities in developing countries to conserve (Matz, 2006, pp.308–10, finds the scheme of benefit-sharing, in combination with access control and state sovereignty, an incentive in itself). To achieve those benefits, profit-sharing agreements between - mostly food and pharmaceutical - companies and the communities hosting biodiversity were anticipated as a legal tool for awarding local people for their conservation efforts. However, the system built on bilateral contracts has been critiqued for legitimising the inequality of contractual relationships, where the commercial parties are more powerful, and for being an inappropriate tool of sharing an international problem, as they tend to downplay some of the rules of the multilateral regime. 21 So far only very few agreements have been concluded, and only one such contract continues to be cited as a successful example. 22 As it emerges, direct use has not been a sufficient means of ensuring a continual provision of ecosystem services, and synergies between the CBD's objectives as such are not sufficient incentives to ensure the provision of the public good aspects of biodiversity. Rather than relying on direct use, it has been suggested that ecosystems services themselves should be integrated into the global accounting system (Hutton and Leader-Williams, 2003). This suggestion implies valuation of biodiversity and its benefits, including in monetary terms.

Integration of biodiversity into the market mechanisms is not contrary to the CBD. The economic value is mentioned as one of values of biodiversity in the preamble. But this is the only expression of its economic benefits. It had been noted already at the time of the conclusion of the CBD that the Convention insufficiently advances the options of ‘harnessing’ markets for biodiversity conservation (Roberts, 1992, pp.341–2). Throughout the regime's operation, these weaknesses have become even more visible as a “modernisation,” or a broader evolution, of the governance has occurred in other fields.

Just around the time of the conclusion of the CBD, the field of economics was becoming an ever more influential discipline in the formulation of national environmental policies (N. Gunningham, 2009, p.185), which had an effect on the international law a few years later. 23 Environmental law has moved away from employing prescriptive command-and-control regulation towards more reflexive Because of space constraints, I do not engage further with the fairness concerns, concerning bilateral contracts. For issues involved, see e.g. Gaia/Grain (2000).

That is the agreement between the U.S. pharmaceutical firm, Merck, and the National Biodiversity Institute (INBio), a scientific, non-profit organization created by the government of Costa Rica, struck in 1991. On the context and content of the agreement, see Coughlin Jr, (1993).

The Kyoto Protocol was the first international instrument to incorporate economic instruments. In innovatively using a variety of regulatory techniques, it is seen as a “pioneer among the multilateral environmental agreements” (see Bothe, 2007).

Jerneja Penca

law, which employs instruments that mimic the market, and are perceived as more efficient, and more conducive to innovation (see e.g. Driesen, 2006; Gunningham, 2009; Freeman and Kolstad, 2007;

Ashford and Caldart, 2008). These shifts have redefined the regulatory options at hand by extending the ensuing regulatory toolbox.24 Concurrently, environmental awareness of consumers and governments has increased, co-shaping a more conscious era of green consumerism, and a demand for green policies. Overall, markets have become the primary organisational principle.25 This has been coupled with the private sector becoming more pronounced on the regulatory stage, at times equalling public actors in authority and power (C. Scott, 2002, providing an analysis and description of the range of forms which such private regulation takes in the United Kingdom; J. Freeman, 2000, demonstrating ‘a deep interdependence among public and private actors in accomplishing the business of governance’). 26 Universal fundamental rights have been diffused among the old – public –, and new – private –, players. The shifts have mostly been described in the simplistic form of ‘new’ law, which is replacing the ‘old’ regulation (see e.g. Teubner et al., 1994; Golub, 1998; Búrca and J. Scott, 2006).



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