A Cap and Trade System: a Solution that Could Turn an Environmental Issue to an Economic Incentive

By: Rebecca Kim

In order to resolve a global issue like climate change, everyone must be involved. Therefore, leaders from different states have the responsibility to convince their constituents to make a difference in regards to climate change. Unfortunately, the realities of politics can prevent leaders from convincing their constituents about the importance of climate change. To explain, every leader’s main goal is to stay in office (or in power) as long as possible. Given the nature of their main goal, leaders of states are driven to please their constituents, especially in democracies where the constituents directly vote the leaders into office. Even in autocracies, there is a type of accountability that controls some of the leaders’ actions; the elites have the power to overthrow the leader if a leader acts on something that every elite disagrees on. Because every leader’s actions must relatively please his or her constituents, leaders must be able to justify their actions.

            However, it can be difficult for leaders to justify the reasons for why people should invest in environmental problems, especially for leaders from developing countries. In other words, people’s primary concern is about their own well-being. Thus, even though environmental issues impact people’s livelihood, most people will focus more on economic or social issues that directly affect their livelihood. Also, in order to please their constituents, leaders are more likely to invest in something that has a positive outcome in the short-run rather than in the long run. Considering that most environmental problems need to be solved in long-term intervals, this could be another reason that causes leader to be hesitant towards supporting environmental issues.

            As a matter of fact, the lack of actions from countries can be seen in current environmental politics. In countries such as China, Brazil, South Africa, and India, the leaders are refusing to set a specific amount of carbon emission reduction in the near future. One of the reasons that China cites to explain their lack of action is because the current carbon emission state was largely caused by the United States and European states. Hence, instead of dividing the current carbon emission burden equally, China argues that the United States and European states should take majority of the burden, which will still give China the chance to industrialize. China is hesitant in supporting environmental problems because reducing their current carbon emission would also mean a reduction in their rate of industrialization. In order to protect the country’s economic interest, China is refusing to support an environmental issue—even though they are fully aware of the dire consequences that carbon emissions can bring in the future.

            Considering that China and many countries alike value economic interests more than environmental interests, this trend, thus, suggests that there must be an economic incentive to persuade countries to partake in environmental issues. To be more specific, one of the reasons why countries could not come to a consensus in the Copenhagen Summit is because the issues discussed were purely driven based on environmental and moral incentives. Relying on moral incentives that emphasize on reducing carbon emission for a better environment is a weak tactic to utilize when the opposing countries primarily value economic development.

         In order to correct one of the flaws in environmental politics that was presented in the Copenhagen Summit, such environmental incentives must be turned into an economic one. By turning an environmental issue into an economic incentive, many opposing countries will be more appealed to partake in an environmental issue. A possible economic incentive to persuade many countries to participate in the carbon emission issue is a cap and trade system.  Even though the cap and trade system also requires a specific limit on carbon emission, the system gives countries the options to either buy carbon emissions from different countries to further industrialize or sell their carbon emissions to make economic gains. The cap and trade system provides economic incentives for countries while reducing the amount of carbon emissions.

The economic incentives that comes from the cap and trade system, as a result, will give more of a justification for leaders to convince their constituents to invest in environmental problems. If leaders are able to illustrate to their constituents that environmental problems have an economic gain, people will be more open to encourage their leader to support an environmental cause, which will lead environmental politics to be more effective.

The North-South Divide: Biodiversity Loss

Like forestry issues, global biodiversity loss illustrates how environmental conservation can be frustrated by the division between the North and South. The availability of unique terrestrial and aquatic plants and animals within developing nations is often utilized by developed nations.  Often, developed nations benefit from the use of these organisms in their medical and agricultural research.  However, developing nations strive to conserve these resources and argue that they suffer the consequences of biodiversity loss caused by this research while reaping none of the benefits.  This topic illustrates issues regarding conservation of resources and the polarization of the North and South.  It is this polarization that in part causes states to become pushers and draggers in negotiations for policies regarding these types of issues  In addition, this topic demonstrates that the framing of an issue can be used to promote the goals of each side of the debate.

Developed nations have cultivated the skills and technology necessary to utilize exotic plants to promote medical and agricultural goals.  Developing nations on the other hand often lack these specialized skills but have access to a wide variety of exotic plant and animal life necessary for this kind of research.  The exploitation of these resources by the North can be viewed as a new type of imperialism of the South and as an attempt to take advantage of developing countries without adequately compensating them.  Because of historical views of imperialism and the perceived threat of the continuation of historical patterns, developing countries could be less likely to negotiate the use of their resources. Developed nations on the other hand, provide technical skill and contribute to the development of the research.  However, they often refuse or are reluctant to negotiate extending benefits to developing nations.  In addition, because medicinal plants are a primary source for healthcare in many developing nations, the South could resist Northern intervention due their different objectives and medical values.  Perceived attempts to imperialize the South and contradictory medical values could make negotiations even more difficult.  This also demonstrates how differences in value systems of the North and South lead to polarization in environmental negotiations.

Because the consequences of biodiversity loss in developing nations are felt primarily by their inhabitants, developing countries are more likely to be pushers for international efforts to conserve biological diversity.  Conversely, developed nations who use exotic plants and animals for research are more likely to be draggers when faced with these types of policies.  This results in increased polarization and stagnation regarding international biodiversity policy.  This can be seen in the Convention on Biological Diversity's (CBD) slow efforts to come to an agreement regarding conservation of biodiversity and just distribution of benefits from research utilizing indigenous biodiversity.  Though the CBD has stated that they value protection of biodiversity in developing states, they have yet to formulate any type of legally binding policy.  This issue demonstrates how the North-South divide can frustrate international environmental agreements and ultimately stall policy.

This issue also raises interesting concerns related to the framing of environmental issues as global commons issues.  More specifically, where it benefited supporters of strong forest policy to frame it as a global commons issue, it would now benefit the South to frame biodiversity as a private good.  This would increase their ability to exercise control over their resources and to demand sufficient compensation from developed countries.  In contrast, to frame biodiversity as a global commons issue would allow for the interests of developed countries to be more strongly considered when creating policy.  This demonstrates the importance of framing and relates to in class discussion regarding how the framing of an issue can set the stage for international negotiations or lead to further divisions between the North and the South.

Solving Climate Change in Small Specific Steps Instead of Large Broad Steps

An international effort to reduce greenhouse gases through the Kyoto Protocol was deemed a failure by many of its critics. The causes of climate change are very complex and involve analysis of a multitude of interrelated factors. In its final form, the Kyoto Protocol was perhaps too ambitious in its attempt to mitigate all of the various contributors to climate change. Problems that involve many elaborate and interconnected issues, such as climate change, may be tackled more effectively by focusing on smaller parts with goals that are more achievable rather than attempting to resolve everything through a single, all-encompassing agreement.

Elements of the Montreal Protocol have been compared to the Kyoto Protocol to understand why the former was considered a major success when compared to the latter’s failure to implement even modest efforts to reduce the release of greenhouse gases. Factors such as the Montreal Protocol’s more specific language and available replacement technology to replace CFC’s are often thought of as reasons for Montreal’s success. Although a very different problem, the United States’ efforts to restore sea turtle populations have similar factors as the Montreal Protocol, and perhaps should also be considered as a model in analyzing factors that could be incorporated into a more effective climate change strategy. Both climate change efforts and sea turtle restoration efforts demonstrate that there are many similarities between the elements of each of these problems. Perhaps the United States should use methods that were developed in restoring sea turtle populations with its leadership role in efforts to roll back the sources of global warming.

Like climate change, endangered sea turtle populations are an international problem that can be traced to a wide variety of factors such as light pollution, oil spills, poaching, and ocean dumping of refuse. Instead of approaching this as an international problem, the United States decided to make its own efforts to restore sea turtle populations. Primary to this effort was a United States requirement that shrimp imported into the country be caught using a Turtle Exclusion Device that did not harm sea turtle populations. Although faced with initial opposition from the World Trade Organization, the United States eventually was able to legally restrict shrimp imports that did not use TEDs.

The importance of this method is that it focused on one achievable goal within the multiple issues that remain unresolved. Unlike the Kyoto Protocol, efforts to restore sea turtles took a concrete step, made possible through modern shrimp harvesting techniques, to address a specific aspect of the larger problem. Whereas Kyoto’s approach was to include a multitude of sources of heat trapping gases that contribute to global warming, sea turtle efforts avoided vagueness in the means of achieving goals by focusing on a narrow issue within the larger constellation of problems that is causing dwindling sea turtle populations. The United States focused on one part of the problem that it was able to remedy due to the available replacement technology. In a similar manner, climate change may be addressed more effectively by focusing on smaller areas of the problem, perhaps looking to replacement technology as a solution.

Addressing greenhouse gases on an individual basis could lead to a step-by-step approach toward a more effective solution to climate change and allow technology to develop replacement energy and materials on a logical path. Additionally focusing on one area of emissions leads to a smoother transition that will be more acceptable to more countries.

It is important to recognize that Kyoto was an international attempt as opposed to the United States’ domestic efforts towards restoring sea turtle populations. International policies have their own set of challenges not the least of which are numerous competing claims for solutions based on self-interest. This was clearly a major difficulty in reaching an enforceable Kyoto Protocol. The sea turtle approach allowed the United States to lead through its unilateral action and without the struggle to find consensus. In doing so, the United States set a standard for reasonable conduct that other concerned nations could adopt at their own pace.

The weak language of Kyoto has often been cited as a reason for its failure. But stricter language may have carried with it another set of issues as many countries would have found it difficult to reduce their emissions due to the wide scope of Kyoto reductions in greenhouse gases. With a specific approach, each polluting gas could be analyzed to determine how best to control it, either through limitation or replacement, and countries could then work toward a transition and reduction in emissions.

When tackling such a large and complex problems, small, achievable steps will be more effective than vague attempts at solving all of its factors at once as shown to be true in both the Montreal Protocol and sea turtle restoration.  Limited and more specific goals can serve as building blocks for the more ambitious solutions that may involve greater economic will and political consensus.

Do International Treaties need technology to be successful?

International treaties mixed with technological advances are the future of solving some of the planet’s gravest environmental problems. The Montreal Protocol, eventually ratified by 197 States, is a prime example of the combination of cooperation and innovation that is needed to solve a worldwide environmental issue. Many people believe that the key to solving these problems is having the technology to do so.

            The Montreal Protocol should be a guideline for future treaties. It took an environmental problem and found the appropriate and effective technology to quickly and efficiently solve it. The treaty is also effective because it took into consideration the need to make revisions in order to get more ratifiers. The treaty is sometimes known as a “universally ratified treaty,” which in terms of environmental problems is a great success and the answer to future problems.

            A debatable topic involved with the Montreal Protocol is the use of technology as a means for being the overall savior to the increasing size of the ozone hole. The Protocol may have been successful, but there is no question that the development of a replacement for chlorofluorocarbons known as HFC’s was what advanced the protocol to a universal success. The treaty was designed to phase out chlorofluorocarbons, but with most of the use happening in developed countries, the push for a substitute became a priority. It is clear that combination of factors needs to be in place to ensure a successful treaty, but in reality there have been little to no extremely successful ones other than the Montreal Protocol. 

            One of the biggest topics in the environmental world is that technology will be the answer to all of our problems. The planet continues to support more humans and continues to ignore some of the biggest issues facing environmental destruction. International environmental concern is usually done in broad terms, such as ozone depletion, climate change, desertification etc. The key to environmental treaties being successful is to focus on the smaller problems which lead to the bigger ones. Technology will inevitably assist in these localized problems.

            A prime example could be the increase in acid rain causing destruction to the world’s aquatic ecosystems. This would once again focus first and foremost on the developed nations, who produce most of the air pollution contributing to acid rain. A treaty following similar guidelines of the Montreal Protocol would encourage phases to reduce emissions (which have occurred in many countries) and continue to be revised as goals are met. The next step would incorporate the use of new technologies, which could be in the form of alternative energies or more efficient pollution catching devices. If there was technology that was an easy replacement for the countries to adopt, as was with Montreal, the problem known as acid rain would diminish quickly and efficiently. The ease and success of a treaty due to technological advances would make any State look foolish for not ratifying. Once the leading states followed the treaties, there would be no reason for it not to become another universal success amongst international treaties.

            Although, many humans consider technology to be the planet’s saving grace and the term ecological modernism is on the rise. There are disbelievers to every great idea. These environmentalists believe that technology and international cooperation alone will not be the answer to the greatest environmental problems, but only prolong the time we have before the greatest effects take place. Many conservationists believe this approach is not environmentally friendly at all, but a means for making human life more comfortable while covering up the truths. These environmentalists believe technology might even make matters worse, a good example is crop yielding. Technology allows us to grow and harvest more and more agriculture, which seems good until you incorporate all of the additional stressors it adds to the environment.

            International treaties will always be a tricky means of solving environmental problems, but the addition of technology has proven to be a very successful factor of solving problems on global scale. Although there is doubt, evidence of the Montreal Protocol shows that universal agreement and quick results are possible with the right factors and revisions to an international treaty. Technology is always changing and these changes will hopefully increase the likelihood of another universal agreement amongst the states of the world. Environmental problems happen on a global level and need to be taken into consideration before it’s too late. 

WTO Environmental Regulations May Not Be What They Seem

In 1947, the General Agreement on Tariffs and Trade served as the basis of the first postwar global trading system. Thirty years later, GATT established a Group on Environmental Measures and International Trade (EMIT) after specialists realized a need to address sustainable development and economic growth as unique factors that heavily impacted each other. While EMIT’s goals were noble, the group did not make notable strides towards combining the ides. These groups set the state for the World Trade Organization’s formation in 1995, including a committee on Trade and Environment to study the relationship between trade and environmental issues. By combining such principles with the foundation of the entire group, the future looked bright for policies that served both the environment and the growing global economy.

Sadly, the WTO has yet to truly provide even ground for all stakeholders. Early in the WTO’s life, a streak of incidents connected by developing countries having their exports blocked by developed nations. These include the 2001 case involving the United States’ application of laws to protect sea turtles. Initially, the WTO found that the United States was not putting forward “serious good faith efforts.” Later, it was found that they were putting forwards “serious good faith efforts.” At no time was this phrase formally defined. While supporters may argue there is no one definition applicable to all scenarios, the current reasoning allows for little transparency. Did the United States truly do enough in the past? How will the public know if their governments are putting forward these supposed good faith efforts? Currently, there is no way of knowing.

Environmental legislation from the DSM is allegedly designed to prevent laws that are intended to protect domestic industries over environmental interests. The issues lies with the WTO’s knowledge and authority. Members are not ecosystem specialists, biologists, or study specialized issues that uniquely impact each operation. Rather, the WTO is comprised of trade experts who are more concerned with trade. Environmental specialists, who would be better equipped to consider long-term ecological effects from proposed legislation, could theoretically be consulted but would not have a final say in the matter. Additionally, the process is difficult for those not affiliated with the business in question or the WTO to have a say in matters. Civilians have a stake in these agreements, weather it be protecting ecosystems they care about or concern for allowing developing nations access to global markets. For them, there is no true representation or even voice within the WTO.

In the end, it’s not that the WTO is inherently anti-environmental or out to further the agenda of northern, developed countries. In some cases, the WTO has ruled against cases of discrimination or argued there was a lack of multilateral support for actions. No, the problem is that we cannot be sure this will always be the way of the WTO. Leaders of the WTO will change over time, and there is no guarantee they will fairly enforce WTO policies. It would only take a few new members with a focus on industry over equity to shift the paradigm of the WTO away from its core values.

 There may be a way to save the WTO, with an idea seeded in the American system of law. Since many of the factors deciding seem to be objective, there exists no solid records or plans for dealing with issues. In law, past precedent is used as a point of reference in future court dealings. Imagine if such a concept could be folded in to WTO dealings. By looking to prior cases for guidance, the WTO can begin to build a collection of data important for dealing with new issues. This precedent is not binding either, but deviating from it requires a new interpretation and justification of existing law. While this idea may not be perfect, the fact remains that the WTO’s current system is not as solid as it may seem. There is always room for improvement.   

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