Making International Environmental Efforts Work:

The Case for a Global Environmental Organization

BY DANIEL C. ESTY AND MARIA H. IVANOVA

Yale Center for Environmental Law and Policy

PREPARED FOR PRESENTATION AT THE OPEN MEETING OF THE GLOBAL ENVIRONMENTAL CHANGE RESEARCH COMMUNITY

RIO DE JANEIRO, OCTOBER 6-8, 2001

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Daniel C. Esty is a professor of environmental law and policy at the Yale Law School and the Yale School of Forestry & Environmental Studies. He is also Director of the Yale Center for Environmental Law and Policy and Associate Dean of the Yale School of Forestry & Environmental Studies (http://www.yale.edu/environment). E-mail: daniel.esty@yale.edu

Maria H. Ivanova is the Director of the Global Environmental Governance Project (http://www.yale.edu/gegdialogue) and doctoral candidate at the Yale School of Forestry & Environmental Studies. E-mail: maria.ivanova@yale.edu

Established in 1994, the Yale Center for Environmental Law and Policy draws on resources throughout Yale University to develop and advance environmental policy locally, regionally, nationally, and globally. One core goal is to develop and advance policies responding to critical environmental problems and to provide a forum in which scholars, environmental advocates, business people, officials, and representatives of international organizations can exchange views.

2001 Yale Center for Environmental Law and Policy301 Prospect StreetNew Haven CT 06511United States(203) 787 - 1414(203) 432 - 3817http://www.yale.edu/envirocenter

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TABLE OF CONTENTS

1. INTRODUCTION...............................................................................4

2. RATIONALE FOR A GLOBAL ENVIRONMENTAL ORGANIZATION. .52.1 THE ENVIRONMENTAL PROBLEMS OF THE 21ST CENTURY......................52.2 THE GLOBAL ENVIRONMENTAL GOVERNANCE SYSTEM...........................6

2.2.1. Failed Collective Action..................................................................62.2.2 Fragmentation.................................................................................72.2.3 Deficient Authority...........................................................................82.2.4 Insufficient Legitimacy....................................................................92.2.5 Fiddling or fixing...........................................................................10

3. FUNCTIONS AND FEATURES OF A GEO........................................103.1 DECISION-MAKING...............................................................................113.2 IMPLEMENTATION.................................................................................113.3 MONITORING........................................................................................123.4 CONFLICT RESOLUTION........................................................................123.5 FEATURES OF A GEO............................................................................12

4. WHAT’S IN A NAME?.....................................................................13

5. ORGANIZATIONAL DESIGN...........................................................13

6. BENEFITS OF A GEO......................................................................156.1 IMPROVED COLLECTIVE ACTION...........................................................156.2 IMPROVED PROBLEM SOLVING.............................................................166.3 IMPROVED LEGITIMACY........................................................................176.4 STRENGTHENED POLICY SPACE FOR THE ENVIRONMENT.....................176.5 IMPROVED FAIRNESS............................................................................17

7. IMPLEMENTATION STRATEGIES..................................................18

8. CONCLUSION.................................................................................19

9. REFERENCES.................................................................................20

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Making International Environmental Efforts Work: The Case for a Global

Environmental Organization

BY DANIEL C. ESTY AND MARIA H. IVANOVA

1. Introduction

Poor performance in response to mounting global scale pollution and natural resource management challenges has spurred interest in rethinking global environmental governance and perhaps restructuring the current institutional architecture. Both former Soviet Union President Mikhail Gorbachev and French President Jacques Chirac have urged the establishment of a Global Environmental Organization.1 While more modest reform agendas, building on the status quo, might also be considered, the nature of the environmental problems at the global level and the inherent shortcomings of the existing structure argue strongly for a broader reconfiguration of the international environmental regime. Significant natural resources, from the ocean bed to the atmosphere, are shared regionally or globally. Yet, despite the multitude of treaties, conventions, and agencies, the current global environmental management system has failed to address and solve problems related to transboundary pollution spillovers and shared resources. A revitalized and strengthened policy mechanism and structure is needed to respond to the scale and complexity of the problems and to the changing context within which they have to be tackled. To this end, options for a new, flexible, and innovative approach to addressing global environmental problems need to be developed. The world community would benefit from the presence of an authoritative environmental voice in the international arena and a recognized 1 “The American and Russian People Don’t Want a New Confrontation,” Newsweek April 27, 2001 full text available at http://www.msnbc.com/news/565665.asp#BODY; “Jacques Chirac s’empare de l’ecologie,” Le Monde, 5 May 2001, p.6, text available at http://www.lemonde.fr. Similar suggestions have also come from French Prime Minister Lionel Jospin, former World Trade Organization director general Renato Ruggiero, Britain’s Sir Leon Brittan, a growing number of business leaders (especially those with global operations) and even The Economist magazine. An increasing volume of literature has begun to accumulate. For the rationale of a global environmental body, see Biermann and Simonis 1998; Biermann 2000, 2001; Esty 1994, 2000, 2000a; Newell 2001; Whalley and Zissimos 2001. For a critique of the concept of a Global Environmental Organization, see Juma 2000, 2000a, von Moltke 2001. The inaugural issue of Global Environmental Politics journal (2001) is largely dedicated to the global environmental governance debate.

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forum for national officials and other stakeholders to work cooperatively to address global issues.In this paper, we advance the case for a Global Environmental Organization (GEO). Our proposal for a GEO builds on a careful analysis of the problems that must be addressed internationally and the key capacities that an international environmental body should possess. We outline a possible organizational structure, sketch out an implementation strategy, and address some of the arguments likely to be raised against creating a GEO.

2. Rationale for a Global Environmental Organization

2.1 The Environmental Problems of the 21st Century

From thinning of the ozone layer to depleted fisheries to the possibility of climate change, the world community faces today a number of inherently global challenges. Advances in a range of ecological sciences continue to unveil new threats to the “global commons” that deserve attention – from airborne mercury to disrupted hydrological systems – as well as new inter-relationships among issues, such as the impact of excess nitrogen from fertilizers or vehicle emissions on terrestrial and marine ecosystems.2 Ecological interdependence is a fact.3 The only question is whether we will manage it thoughtfully, explicitly, and effectively or on an unsystematic and ad hoc basis. Clearly, some environmental problems are of limited geographic scope and can be handled at the national scale. But governments around the world are beginning to recognize their inability to address the many environmental problems with international implications on their own. Thus, stronger national, state/regional and local environmental performance is necessary, but cannot substitute for appropriate action at the global scale.And the problem is not just environmental. Basic economics teaches that unregulated shared resources are at risk of overexploitation. Fish stocks, for instance, can be run down quickly if every fisherman tries to catch as many fish as possible as quickly as possible.

2 WRI 1998-1999.3 As emphasized by UN Secretary-General Kofi Annan, “No crisis in history has so clearly demonstrated the interdependence of nations as the environmental crisis.” UNEP 2000.

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Similarly, transboundary spillovers of pollution (such as SO2 emissions drifting downwind and causing acid rain or contamination of shared rivers, such as the Danube) cannot be adequately addressed at the national scale. If not controlled, such “uninternalized externalities”4 lead to “market failures” and result in allocative inefficiency in the economic realm, reduced gains from trade, and lost social welfare, not to mention environmental degradation. As the longstanding literature on “public goods” makes clear,5 collective action to address externalities must be at the scale on which the harms arise. Thus, some sort of functioning global environmental regime becomes an economic as well as an ecological necessity. Because environmental problems are diverse and arise at different scales, a governance structure must similarly be multi-tier in structure. What is therefore needed is a “nesting” of institutions6 – a framework of local, regional, national, and international policy mechanisms for a comprehensive, effective and integrated approach to environmental governance.

2.2 The Global Environmental Governance System

It is now widely acknowledged that the current international environmental regime is performing poorly.7 From halting efforts to understand and confront the prospect of climate change to pressing issues of food safety, dissatisfaction among politicians, business people, environmentalists, and the general public abounds. Some of the failings can be attributed to a history of management shortcomings and bureaucratic entanglements, but other aspects of the problem are deeper and more structural. Four major issues deserve particular focus:

2.2.1. Failed Collective ActionEnvironmental regulation at the global level requires an extraordinary degree of cooperation among nations. In academic lingo, it presents a difficult “collective action” problem.8 Because international 4 The concept of an externality was first elaborated by Arthur Pigou in 1912 when he analyzed how a factory would produce more than the optimal amount of smoke because of a divergence between private and social costs. Pigou expanded on this discussion in his The Economics of Welfare ([1920]1962). Ronald Coase (1960) enriched and corrected the Pigouvian framework by pointing out that in a world of well-defined property rights and zero transaction costs exchange will eliminate externalities and ensure that resources are allocated to their highest valued use.5 See Mancur Olson, The Logic of Collective Action (1965).6 See WHAT 2000.7 See UNEP 2001; French 2000; Hempel 1996.8 A collective action problem occurs when rational individual action by each of the members of a group would lead to a sub-optimal collective outcome. The most notable examples are in natural resource or global commons use where maximizing individual utility leads to a depletion and ultimate ruin of the

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environmental problems are diffuse – spread across space and time – incentives arise to ignore transboundary emissions and neglect the management of shared resources. Likewise, the concentration of abatement costs (borne fully within the country undertaking pollution control programs) and the diffusion of the benefits (spread across the world) makes free-riding on the efforts of others attractive. Quite simply, the spatial scale and temporal diffusion of international environmental issues makes the impacts of externalized harms hard to see – and thus the benefits of cooperation less than obvious. As a fundamental matter, unless countries perceive problems as real and thus recognize the advantages of collaboration, the transaction costs of organizing and sustaining international cooperation become overwhelming. The fragmentation, gaps in issue coverage, and even contradictions among different treaties, organizations, and agencies with environmental responsibilities make international environmental policy coherence hard to achieve. A pervasive lack of data, information, and very limited policy transparency adds to the challenge, making even agreement on the scope of problems hard to get. This obscurity and confusion heightens the allure of letting others carry the environmental burden. But, of course, when everyone chooses to stand on the sidelines, no action is taken. With limited exceptions (e.g., ozone layer protection), the global environmental scene in the last decade has involved too much watching and talking and too little effective action. On most issues, the results from the international environmental regime have fallen short of both expectations and needs. International coordination, issue identification, policy analysis, problem solving, and capacity building have been inadequate in many areas, including climate change, fisheries management, trade and environment, biodiversity, and desertification.9

The pattern of sub-optimal policy outcomes can be traced to many sources: limited human and financial resources, bureaucratic inefficiencies, inadequate scientific underpinnings, and a lack of commitment to analytic rigor in a number of international bodies. But the core problem is, at least in part, structural. Other global challenges—international economic management, population control,

resource. See for example, Hardin 1968, citing the case of a common pasture where adding more cattle is a rational individual decision but results in the destruction of the shared natural resource and ultimately to negative economic consequences. The seminal work in collective action theory is Mancur Olson’s “The Logic of Collective Action: public goods and the theory of groups,” 1971.9 These weaknesses are recognized by UNEP in the Malmö Ministerial Declaration adopted in May 2000, noting that there is “an increasing rate of deterioration of the environment and the natural resource base, [and] an alarming discrepancy between commitments and action.” Full text available at http://www.unep.org

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and various world health problems (e.g., eradication of polio and small pox) have been addressed more successfully. In the international environmental domain, success has been achieved in a small number of cases where case specific institutional mechanisms sufficient to a particular problem emerged, the costs of the status quo and the benefits of action were realized, and political entrepreneurship was harnessed to develop effective, efficient, and innovative policy solutions.10 But the list of successes is short. In brief, institutions matter. The international environmental architecture has proven itself incapable of living up to the challenges it faces. Change is required to better facilitate cooperation in response to global issues.

2.2.2 FragmentationInternational environmental responsibilities are spread across too many institutions with diffuse, overlapping, and even conflicting mandates.11 Thus, the United Nations Environment Programme (UNEP) competes for time, attention, and resources with more than a dozen other UN bodies (such as the Commission for Sustainable Development (CSD), the World Meteorological Organization (WMO), the International Oceanographic Commission (IOC), the UN Educational, Scientific and Cultural Organization (UNESCO) and others) with environmental responsibilities and interests. UNEP, UNDP, WMO, as well as the Organization for Economic Cooperation and Development (OECD) and the World Bank, for example, all have climate change programs underway with little coordination and no sense of strategic division of labor. In a similar vein, the World Humanity Action Trust Commission on Water has identified more than twenty bodies and specialized agencies within the UN system with water programs.12 Adding to this fragmentation are the independent secretariats to numerous treaties including the Montreal Protocol (ozone layer protection), the Basel Convention (hazardous waste trade), the Convention on International Trade in Endangered Species (CITES), the Climate Change Convention, and many others. In fact, there are now over 500 multilateral environmental treaties, and 60 per cent of

10 The most notable global example is the regime for protection of the ozone layer. There are many regional examples of successful cooperation, especially within the scope of regional seas conventions. For an extensive discussion of the various Multilateral Environmental Agreements, see UNEP 2001a, “Multilateral Environmental Agreements: A Summary, Report of the Executive Director” (UNEP/IGM/1/INF/1). Full text available at http://www.unep.org/ieg11 For a discussion of the fragmentation problem by UNEP, see UNEP 2001, “International Environmental Governance: Report of the Executive Director,” (UNEP/IGM/1/2). Full text available at http://www.unep.org/ieg 12 WHAT 2000, at 20.

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them have come into existence since the Stockholm Conference in 1972.13 Many of these agreements are limited in scope along issue and geographic areas. As pointed out in the report of UNEP’s Executive Director on Multilateral Environmental Agreements, “[f]rom a combined global and regional perspective, the resultant proliferation of MEAs has placed an increasing burden on Parties and member states to meet their collective obligations and responsibilities to implement environmental conventions and related international agreements.”14 When similar “treaty congestion” threatened to break down international efforts to regulate intellectual property, a single body, the World Intellectual Property Organization, was launched to consolidate global scale efforts and achieve scale economies in management. The environmental regime faces a similar pressing need for streamlining and coherence.

2.2.3 Deficient AuthorityThe existing international environmental institutions, especially UNEP, are hampered by narrow or vague mandates, small budgets, and limited political support. No one organization has the political authority, vitality, expertise, and profile to serve as the center of gravity for the international environmental regime and to exert sustained political influence in other global fora. The contrast with other international regimes is striking. UNEP, set up as a program rather than as an autonomous agency, lacks the necessary legal authority, budget, and staff to manage (or even coordinate) global environmental policymaking. 15 More critically, it has failed to attract and retain a first-rate staff. These weaknesses translate into poor performance and mean that the UNEP analyses and recommendations often do not carry much clout. A reputation for authoritativeness might alternatively have been established if UNEP had positioned itself as a “global public policy network,”16 pulling in expertise from around the world. But this model was not developed either.With an annual budget of $60 million,17 UNEP limps from one fiscal crisis to the next. The funding mechanism of “voluntary

13 UNEP 2001a, at 2.14 Ibid. at 3.15 For an extensive review and analysis of UNEP’s role in global environmental governance and an assessment of past and present reform initiatives, see Desai 2000. For an assessment of UNEP’s strengths and weaknesses as regards global environmental governance, see UNEP 2001.16 For an analysis and review of the Global Public Policy Networks concept, see infra notes 25-25 and accompanying text.17 $60 million constitutes the approved appropriations by UNEP’s Governing Council for 2001; the actual contributions are expected to amount to less than $50 million. For more information on trends in financing from 1994 to 2003, see Desai 2000, at 474.

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contributions” as opposed to “assessed contributions” leaves the organization vulnerable to the demands donors attach to financing. And the limited resources available have often been spread too thin. While set up as a mechanism for tackling global environmental issues, UNEP has been pushed to take on project responsibilities that it has neither the budget nor the structure to manage. Furthermore, political instability, serious personal safety issues, and a lack of a modern communications infrastructure in Nairobi have hampered progress. The international environmental regime has thus become mired in a cycle of decline. UNEP’s structural handicaps have led to its output being judged as modest and not very useful. This weak performance results in reduced political support, greater difficulty in attracting highly competent staff, and continuous budget problems as donors look elsewhere for ways to deploy their limited environmental resources. Results further deteriorate, and the downward spiral accelerates.

2.2.4 Insufficient LegitimacyThe existing international environmental regime has failed to adequately deal with the priorities of both developed and developing countries. As a result, there is little commitment across the world community to the success of the global environmental regime – and little sense of the importance or legitimacy lodged in the institutions that make up this regime. The Commission on Sustainable Development, set up to address economic, social, and environmental objectives in an integrated manner, has failed to galvanize the world community in support of sustainable development. It has not even succeeded in clarifying what the term means much less how it should be translated into a concrete action agenda.18

Inattention on the part of industrialized countries to the need for a concerted worldwide effort to alleviate poverty has had significant spillovers into other issue areas. In many countries, there is a sense that the Rio Earth Summit compact – a simultaneous focus on the development needs of poorer countries and the environmental goals of wealthier nations – has not been kept.19 The North’s limited

18 This problem was articulated most recently by Nitin Desai, Under-Secretary-General for economic and social affairs, at the organizational session of the Commission on Sustainable Development acting as a Preparatory Committee for the World Summit on Sustainable Development, April 30 – May 2, 2001, New York.19 See the discussion paper by the South African NGO Caucus on the World Summit for Sustainable Development, “Towards the World Summit on Sustainable Development,” published by the Heinrich Böll Foundation, World Summit 2002 Papers No.1. “Nice words, no action. While the Earth Summit in 1992 generated a tremendous wave of enthusiasm for promoting sustainable development, many non-governmental organizations that have followed the progress of governments and international bodies

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initiatives to help to build environmental capacities in developing countries through financial and technological transfers has added to the sense of disillusionment with the current global environmental regime and its structures. While the United States, the EU, and Japan reject the charge that they failed to follow through on commitments made at Rio, the lack of progress on the international environmental policy front is palpable. The inadequacy and dispersion of the existing financial mechanisms – scattered across the Global Environmental Facility, UN Development Programme, World Bank, and separate funds such as the Montreal Protocol Finance Mechanism – reinforces the perception of a lack of seriousness in the North about the plight of the South. Furthermore, fundamental principles of good governance such as representativeness, transparency, and accountability are still at issue in many of the institutions with environmental responsibilities. These procedural shortcomings undermine the legitimacy of the system as a whole. Concerns arise not just from governments. The ongoing street protests by a range of environmental non-governmental organizations, from Washington to Prague, about the role of the World Bank and the IMF are emblematic of broader public dissatisfaction with how environmental issues are being managed at the global scale. These protests can also be seen as a signal of distress about the way globalization is unfolding and a sense that important values are being lost in the headlong rush for liberalized trade and economic growth.

2.2.5 Fiddling or fixingA multi-prong agenda of refinements and reform could be developed to address these many issues. But the list of problems is so long and the baggage associated with the current regime is so heavy that, at some point, a fundamental restructuring rather than incremental tinkering becomes a better path forward. In the face of so many difficulties and the existing regime’s poor track record, any presumption in favor of working with the status quo cannot be sustained. Moreover, as the analysis above suggests, the nub of the issue is structural, making a different starting point and a new institutional design advisable.

3. Functions and Features of a GEOThe core function of a new Global Environmental Organization should be to fashion a coherent and effective international response to towards meeting the targets and recommendations which were set out in the Rio pledges, have witnessed little progress in some of the most critical areas,” at 6.

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global-scale pollution control and natural resource management issues. At the national level, systems exist to regulate business, harness market forces, and ensure collective action in response to a range of environmental problems. With regard to the atmosphere, oceans, seabed, and other elements of the global (and regional) commons, such structures do not exist or are not functioning.20 Conceptually, a GEO fills an undeniable need for a mechanism to promote collective action at the international scale. Practically, a new body offers the chance to build a coherent and integrated environmental policymaking and management framework that addresses the challenges of a shared global ecosystem. A GEO must, of course, accommodate the diverse needs of countries across the Earth and be responsive to the concerns of the increasing number of actors or stakeholders (business entities, environmental groups, and the broader set of non-governmental organizations that make up civil society) beyond national governments. And movement forward on the environmental front must be paired with a real commitment to poverty alleviation and economic growth across the world so that the vision of sustainable development can be achieved.With these needs in mind, we see four core capacities as essential in a revitalized international environmental regime: (1) decision-making, (2) implementation, (3) monitoring, and (4) dispute resolution.21 A GEO should also be organized around good governance principles such as subsidiarity, integration, participation, transparency, and accountability.

3.1 Decision-MakingSound environmental decision-making hinges on the availability of data, information, and analysis. To ensure sensitivity to the diversity of circumstances and values that exists across countries, any new body must be committed to open process and vigorous debate. A GEO should thus be capable of executing the following functions: Scientific assessment , including environmental data collection and

analysis. Reliable data of high quality and comparability would support an integrated, ecosystem-based approach to problem definition and assessment. A strong data foundation would also

20 See WHAT 2000 distinguishing between three levels of commons—global commons (those outside national territorial limits, such as the high seas, the atmosphere, and Antarctica); regional commons (watersheds, basins, and other ecosystems crossing national borders and under the potential control and management of a group of states); and national commons (local resources within the nation state and under the control of national or sub-national governments). The interconnectedness among these levels is recognized but the lack of adequate institutional mechanisms for global commons management is notable.21 Tamiotti and Finger 2001 identify the first three functions fundamental to environmental organizations. We believe that conflict resolution is an important function for a GEO that would facilitate collective action and ensure effective and equitable environmental solutions.

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permit much more vigorous initiatives to identify and disseminate information on best practices in the policy and technology realms. Long-term forecasting of environmental trends, early warnings of environmental risks, and intergenerational impact assessments could be devised on the basis of such data.

Knowledge networking , drawing on a wide range of sources for information and data, problem identification, impact analysis, policy option development, and program evaluations. Given the inherent complexity and uncertainty of environmental policymaking, it is especially important that problems be approached from multiple perspectives so as to facilitate broad-based agreement on the best route forward.

Rule-making , starting with the establishment of policy guidelines and international norms, which might, over time, develop into more formal rules. Broader access to data, information, and knowledge promotes consensus building on the scope of problems and ultimately movement toward broadly accepted norms. Laying the analytic groundwork for guidelines, identifying ways to address problems that require a “common but differentiated” response, and conducting international negotiations, especially with regard to transboundary externalities and the management of shared resources, would be critical functions.

3.2 ImplementationUltimately, the implementation of global environmental agreements and compliance with international commitments becomes a matter of execution at the national and local levels. Building environmental capacity within nation-states is thus of critical importance. Comparative data and public disclosure of results represent critical tools in the push for international environmental progress. Shared information allows best practices, technologies, and policies to be identified, highlighting the opportunities for laggards to learn from those at the leading edge. Structured programs of financial, scientific, management, and technical assistance will also be needed, mobilizing both public and private resources and expertise.

3.3 Monitoring The monitoring capacity of a GEO should include the continuous and systematic collection and evaluation of data on environmental performance and trends. Data and information lies at the heart of good decisionmaking. And while compliance monitoring should primarily be the function of regional or national organizations, a GEO

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could provide a central repository for such information and a mechanism for making the information available to concerned parties.Development and systematic review of a core set of environmental indicators is central to good environmental decisionmaking. A common set of cross-country pollution control and natural resource metrics, data on trendlines, and a commitment to benchmarking at the national, regional, local, and corporate scales would enhance opportunities for policy progress. In addition, careful tracking of trends could provide the foundation for an early warning mechanism that would facilitate the timely forecasting and identification of environmental disasters and areas at risk.

3.4 Conflict ResolutionA GEO needs procedures to promote conflict resolution, including convening authority and agreed mechanisms for dispute settlement that draw on appropriate scientific and technical expertise. The structures developed need to take account of differences in levels of development as well as cultural and values diversity to promote ongoing cooperation and reconciliation.

3.5 Features of a GEOThe key attributes of a GEO should reflect the principles of good governance, including subsidiarity, an integrated approach to policymaking, broad-based participation, transparency and accountability. It is now widely recognized that under the “environmental” rubric fall a broad-based set of issues which require a multi-layered structure to address them. The principle of subsidiarity (and federalism), urging that decisions be taken at the most decentralized level that can competently address the issue at hand, is a core element of sound environmental policy. This principle suggests the need for division of labor among the various levels of governance and a carefully delineated and limited agenda for the global-scale environmental body. Focus will be a key to success for any revitalized international environmental body. To be effective, a Global Environmental Organization should also be flexible and responsive to change. It should possess credibility among environmental groups and other NGOs, within the business community, and more broadly within the UN system. Analytic rigor, a commitment to sound science, a first-rate staff capable of convening experts from around the world, modern management, and an oversight mechanism are other essential features. Notably, the availability of adequate and predictable resources will be critical to the capabilities of a GEO.

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A commitment to drawing into the international policymaking process the best data, thinking, analysis, and policy experience from the multinational economic institutions (WTO, World Bank, IMF), all the UN entities with environmental responsibilities (CSD, UNDP, UNCTAD, etc.), the private sector, non-governmental organizations, the academic community, and civil society at large would dramatically transform the global environmental decision-making. A GEO could provide the forum where such knowledge and expertise come together.

4. What’s in a Name?Proposals for establishing a global environmental body are not new. The first call for such an organization appeared in 1970.22 Thirty years later the debate has unfolded with a new vigor but the process has become more complicated. A range of new actors and stakeholders must be given a chance to be heard. Any proposals for reform of the institutional architecture need to take this new political setting into consideration along with the new nature of the global environmental challenges. We argue for the creation of a Global Environmental Organization, which differs from proposals for a World Environment Organization (WEO) in terms of the core function and organizational structure of the proposed entity.23 We draw a conscious distinction between “global” environmental concerns and the environmental problems of the “world,” which include many issues that span the globe but have only local impact. Upholding subsidiarity as a basic tenet of environmental governance, we contend that the organizing principle and functions of a Global Environmental Organization should originate in the set of problems that are inherently transboundary—protection of the global commons. With regard to local or national scale harms, we envision a main thrust of the GEO’s efforts to be information exchange to support technology transfer and the identification of best practices at policy, community, and corporate levels. But we foresee no project or operational role for the GEO on such issues. We believe that, while independently very important, activities aimed at local issues (provision of drinking water, wastewater treatment, land management, air pollution control, etc.) should be undertaken by national governments supported by UNDP, the World Bank, and other development entities.22 See Kennan 1970 advocating the establishment of an International Environmental Agency. 23 Frank Biermann, for example, argues that a World Environment Organization should be capable of addressing problems related to “purely local environmental goods, such as outdoor and indoor air pollution.” See Biermann 2001, at 49.

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5. Organizational Design

Building an institution with a clear mandate, stable funding, and clear legitimacy to address the problems that nation states are incapable of tackling single-handedly will take extraordinary political skill and leadership. A successful strategy for advancing a GEO will require some combination, consolidation, and reorganization of the existing system. The institutional mechanism we advance is one based on a multi-layered structure to respond to multi-dimensional environmental problems and an extensive public policy network to ensure participation, transparency, and accountability.We ultimately envision a three-level structure (or what Maurice Strong has termed “a triple umbrella”), integrating various international environmental bodies with differing degrees of intensity—consolidation, coordination, consultation. The core function of the new organization should be to fashion a coherent and effective international response to inherently global issues, e.g., those affecting the atmosphere, biodiversity, and the oceans. At the center of the entity, we would therefore place the organizations responsible for the global commons—UNEP, WMO, the International Oceanographic Commission (IOC) and International Hydrological Programme (IHP) of UNESCO—to form the GEO. The organization’s second level would bring together the structures and secretariats created under the spectrum of multilateral environmental agreements. These treaty bodies would be “co-located” with the GEO and integrated on the principle of coordination, with a softer degree of control, and an aim to create substantive synergies and economies of scale without compromising the legal character and independence of the Conference of the Parties to each treaty. 24 The Global Environmental Organization would serve as a common management mechanism for these entities and seek to streamline their operations and improve their effectiveness through a measure of coordinated budgeting, administration, staffing, resource rationalization, and issue prioritization. The third level would involve no direct control but strong and permanent consultation links with other international bodies that have environmental responsibilities including the CSD, UNDP, FAO, WHO, and UNESCO. A further set of consultative relationships would be

24 Proposals for clustering of MEAs have been advanced both along issue lines into five areas: atmospheric, maritime, land, chemicals, and biodiversity-related conventions (UNEP 2001a), and along cross-cutting, functional issues such as trade, capacity building, and the development of national implementing legislation (UNEP 2001). Most important in any coordination attempt would be the clustering of missions and activities and realizing tangible synergies. Certain degree of both physical and virtual co-location would be important in this regard.

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established with multilateral economic and development agencies, including the World Bank, regional development banks, and the WTO, as well as with non-governmental organizations working in the field of environment.A critical element of a new organization is the voting procedure. Voting rules are of particular importance for traditionally powerful and traditionally weak states. Developed countries view the UN style “one country – one vote” approach as an effective veto power incapacitating most decisionmaking. To developing countries, on the other hand, the “one dollar – one vote” practices of international financial institutions are unacceptable. We believe the new environmental regime should strive for decision by consensus, and that decisionmaking rules should facilitate North-South cooperation. The “double majority” voting mechanism of the Multilateral Fund of the Montreal Protocol may provide a good model in this regard.25 One red herring needs to be addressed emphatically: the GEO would not add a new layer of international bureaucracy or create a world government. Quite to the contrary, the innovative and modern organizational structure we envision could be largely virtual. Moreover, movement toward a GEO should entail consolidation of many of the existing panoply of international environmental institutions and provide a streamlined mechanism for managing ecological interdependence. At the center of our proposal for a GEO lies a global public policy network – drawing in issue-specific expertise – from around the world. Such networks, made up of relatively stable sets of private and public organizations, can operate as a flexible coordinating system, bringing together the public sector (states and international public organizations), civil society (NGOs, community groups, and others), and the private sector (corporations, other businesses, and their associations)26 for the purposes of agenda-setting, analysis, negotiation, policy formulation, implementation, and institutional learning. Global public policy networks represent an innovative organizational and social mechanism for responding to an ever more complex international policy environment. The flexible structure makes it possible to take advantage of Digital Age27 communications

25 For an argument supporting this view, see Esty 1994; Biermann 1998, 2000. Desai 2000, on the other hand, proposes a “one state – one vote” system for a new body which he calls United Nations Environmental Protection Organization, at 497.26 For an extensive analysis of global public policy networks, see Wolfgang H. Reinicke and Francis Deng 2000, “Critical Choices: The United Nations, Networks, and the Future of Global Governance,” available at http://www.globalpublicpolicy.net 27 For a run-down on the environmental potential of the Information Age, see Daniel C. Esty, “Digital Earth: Saving the Environment,” OECD Observer (May 2001).

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and information technologies to build new opportunities for cooperation.28

6. Benefits of a GEOEnvironmental improvements are often seen as a burden rather than as a collective good. Any reform of the institutional architecture is likely to be viewed with doubt, skepticism, and fears about the costs to be borne. The fundamental question for governments in North and South alike would be “what’s in it for me?” Countries in the North seek effectiveness and efficiency in addressing global scale harms that threaten to impose real costs on their societies. Nations in the South want economic growth and an equitable global scale environmental approach that does not undermine their development. A more streamlined and rationalized structure would be better able to address both sides of this equation by providing an institutional mechanism for solving problems requiring international cooperation, by eliminating overlapping mandates, freeing additional resources and enhancing transparency, accountability and participation. Some of the benefits from institutional reform resulting in the creation of a Global Environmental Organization would thus include:

6.1 Improved Collective ActionSolving a collective action problem involves three phases. First, the possibilities for cooperation need to be identified and their relative value assessed. Second, the parties need to agree on a scheme of cooperation that produces most benefits for most actors and bargain for their distribution. Third, parties to the cooperative agreement would require assurance—through monitoring and, possibly, enforcement—that the other signatories are complying with their commitments.29 Thus, solving collective action problems involves large transaction costs that no single actor would be willing to bear in the absence of cooperation from others.30 Shifting from a prisoners’ dilemma world of free-riding and lose-lose outcomes to one where reciprocity is recognized and collaboration understood requires a carefully constructed institutional architecture.

28 Examples of successful public policy networks include the The World Commission on Dams (recently awarded the highest environmental recognition, the Zayed International Prize for the Environment, for effectively addressing the environmental impacts of large dams and setting a standard for other complex environmental problems), The Global Knowledge Partnership, the Roll Back Malaria initiative, etc. For more information on these and other public policy networks, see http://www.yale.edu/gegdialogue/morepublicpolicynetwork.html

29 Taylor and Singleton 1993.30 On the issue of transaction costs, see Coase 1960.

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A GEO would be able to provide the framework for addressing collective action problems by (1) creating a policy space for continuous interaction among actors, (2) ensuring that multi-dimensional issues are addressed directly and with full participation, and (3) revealing the common interests of the parties through a continuous flow of information. Consensus building, critical for the solution of environmental problems, would be facilitated within an institutional structure that highlights the “repeat” nature of the “game.” Multi-dimensional relations can facilitate agreement by providing opportunities for trade-offs that compensate for differences in cooperative gains.31 The burdens of participation, the risk of being a contributor while others are free-riding, and the threat of loss of competitiveness to violators would likewise be reduced through a structure that systematically tracks commitments and exposes non-compliance with agreements. A fixed, open, and transparent institutional structure would further allow developing countries not only to have their voices heard more clearly but also to more easily form coalitions for bargaining on issues of particular importance.

6.2 Improved Problem Solving

Information, knowledge, and the capacity to apply them are critical conditions for enabling effective problem solving. A rationalized organizational structure with a central goal of addressing environmental concerns in an integrated manner using modern technology and information tools has much to offer. With a global public policy network at its core, a GEO offers the promise of broader participation, more analytic rigor, and better problem solving. By reducing the overlap of responsibilities that handicaps the current regime, a GEO would allow for better budget and issue prioritization and more focused policy responses. It would facilitate an appropriate matching of planetary needs with funding commitments, increased effectiveness and efficiency in responding to environmental challenges, and a more sharply focused international environmental regime. A more streamlined and even “virtual” structure would be especially beneficial to developing countries whose limited human and financial resources could be concentrated on the key negotiations and meetings. Understaffed environment officials in the developing world would not have to spend their time traversing the world from meeting to meeting, negotiation to negotiation.

31 See McGinnis 1986 and Sand 1991, cited in Taylor and Singleton 1993. See Whalley and Zissimos 2001 for a proposal of a global environmental organization as a “mechanism through which environmental commitments made by custodians of environmental assets with global reach could be exchanged for non-environmental considerations (including money), and thereby make progress towards internalizing the externalities involved,” at 30.

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6.3 Improved LegitimacyCompliance with international obligations is not solely a function of the probability of sanctions, but also of a perception of fairness, legitimacy, and morality of the law. 32 These perceptions hinge on both “distributive justice” and “procedural justice,” making the fairness of the outcome and the process important variables. If norms, rules, and principles are seen as legitimate, they will garner support and adherence. Countries will often comply with rules if there has been adequate representation and participation in the process of developing them, even if the final outcome is not to their immediate advantage.33 Ultimately, the legitimacy of international institutions depends on whether they deliver useful results and whether their decisions arise from an appropriate political process. Principles such as participation, democracy and due process are thus central to legitimacy.An innovative institutional mechanism, such as that embodied in the GEO proposal outlined above, would help to build support for international environmental initiatives. A body that engages governments and non-governmental entities alike, promotes full and open debate, draws in wide-ranging expertise, and subjects all decisions to careful scrutiny and review will systematically produce better and more durable policy outcomes. Such substantive strength and procedural care is what creates a sense of authoritativeness and fairness – and therefore legitimacy.

6.4 Strengthened Policy Space for the EnvironmentA consolidated environmental regime would not only provide a new center of gravity for addressing inherently global environmental concerns, but would also establish a counterpart and counterbalance to the WTO, World Bank, IMF, and other elements of the international economic regime. A Global Environmental Organization would be especially useful as a way of unburdening the trading system of environmental decisionmaking that it does not have the capacity to handle. A GEO would provide an important degree of parallelism on the international scene, helping to build sensitivity to pollution control and natural resource management issues into the WTO—and greater sensitivity to trade and economic concerns into international environmental policymaking and treaties. It is therefore of critical importance that a GEO be able to work with the WTO, the World Bank, UNDP, and other bodies to establish a functional division of responsibilities where trade, environment, and development intersect.32 See Tyler 1990.33 Ibid.

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6.5 Improved FairnessThe concerns of developing countries about equity are often cited as an impediment to devising a new institutional mechanism. This equity agenda has a number of dimensions. One question centers on who participates in the decisionmaking process. A consolidated environmental regime would be especially valuable for developing nations. In particular, a single forum and venue would make it much easier to monitor the spectrum of international environmental issues at play and to contribute thoughtfully to the global scale debate even with a relatively small international policymaking team. There would be no need for the already over-stretched Environment Ministries of the South to traipse around the world trying to keep up with the plethora of separate bodies and meetings.A second issue involves who will pay for global scale environmental problem solving. By placing the principle of common but differentiated responsibilities at the center of a GEO, efforts to strike a fair balance of rights and responsibilities with regard to transboundary environmental issues would be improved. A more carefully constructed and coherent set of international environmental standards would also alleviate fears in the South that the industrialized world will impose unreasonably high standards (and perhaps trade penalties for non-compliance) on developing countries, all of whom have many competing demands for limited public resources. In this regard, a funding mechanism to subsidize developing country activities in pursuit of global environmental goals will be essential. It would again be useful to consider establishing a new unified mechanism -- building on the Global Environmental Facility – characterized by transparency, accountability, and equitable decisionmaking.A third issue is whether Southern priorities, especially a commitment to poverty alleviation, will be taken seriously. In this regard, as noted above, the launch of a GEO must be accompanied by a parallel commitment to an invigorated development agenda. A related question is whose values will be promoted in a strengthened international environmental regime. Such concerns make it essential that a GEO be seen as an inclusive forum that seeks to build consensus on a basis that respects the diversity of views present across the world. It should also be noted that, properly managed public policy networks create virtual public space that is easier to enter than the established physical fora where decisions are currently made. An Information Age set of outreach mechanisms could also decrease the distance between decentralized constituencies and global decisionmakers – making it easier to insert into the policy

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process the broad array of values, perceptions, and perspectives that are now often overlooked or incompletely considered and facilitating public understanding of the issues being addressed and decisions being made at the global scale.

7. Implementation StrategiesAn extraordinary mix of political idealism and pragmatism will be required to strengthen the international environmental regime. One approach would be to start modestly and have the new organization grow into its mandate over time. For example, creating a proto-GEO with an initial mandate that includes (1) scientific assessment, (2) knowledge networking and (3) capacity building might attract broad-based support. Scientific activities represent the dimension of the policy realm where scale economies and other efficiency gains can most quickly be realized from increased cooperation. Knowledge dissemination and capacity building would also benefit from a more coordinated and streamlined approach. With its competence established in these areas, the GEO mandate might be expanded to include monitoring and coordination. Subsequently, the organization could assume added responsibilities for rule making and conflict resolution. A second approach would be to “seize the moment,” perhaps at the World Summit on Sustainable Development in Johannesburg in 2002, to launch a full-blown GEO. A revitalized international environmental regime, centered on a GEO, might be created as part of a two-pronged agenda for sustainable development with the other dimension being a poverty alleviation initiative (driven through an invigorated World Bank, UNDP, and CSD).

8. ConclusionThe global environmental management system is clearly falling short of both the world community’s needs and expectations. Without a concerted effort to address transboundary pollution spillovers systematically and to utilize the shared resources of the global commons responsibly, the promise of sustainable development cannot be achieved. It is time therefore to re-engineer the regime, aiming for a new, forward-looking, sleeker, and more efficient architecture that will better serve environmental, governmental, public, and business needs. The logic of a Global Environmental Organization is straightforward: a globalizing world requires thoughtful ways to manage ecological interdependence and we need to create an institutional mechanism that is up to the task.

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