The combined efforts by all states are required to combat some challenges. The implementation of the Montreal Protocol (UNEP, 1987) is an example of the successful provision of a GPG through ‘aggregate efforts’. The Montreal Protocol came into force in January 1989, with the worldwide ambition of eliminating the consumption of ozone depleting substances. By 2006 the 191 parties that had ratified the treaty had, in aggregate, reduced their consumption of these substances by 95 per cent (UNEP, 2007). By 2009 it was the first United Nations treaty to achieve universal ratification and consumption of 98 per cent of all controlled substances had been phased out (UNEP, 2009). It was successful for a number of reasons, including the trade provisions it contained, which limited signatories to trade only with other signatories, a sense of
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common threat that established a common purpose, and the implementation of a non-punitive compliance procedure.
In addition, the Montreal Protocol introduced a number of innovative principles, which are now common practice in international treaties, such as the
‘precautionary principle’,9 which allows for action to be taken even when the science is not yet conclusive. It also introduces the concept of common but differentiated responsibilities (CBDR),10 which is particularly relevant in climate change negotiations as it allows for developed countries to bear the bulk of the responsibility for tackling climate change due to their historic emissions and greater financial resources.
Enshrined as Principle 7 in the Rio Declaration on Environment and Development (UNEP, 1992) the principle of common but differentiated responsibilities (CBDR) has been used in the Kyoto Protocol (IPCC, 1997) and has been included in the Rio+20 outcome document, The Future We Want (UNGA, 2012) designed to be the mandate for the Sustainable Development Goals (SDGs). The Group of 77 and China have advocated for it to become an
‘overarching principle’ in the SDG framework. However, despite its success in
9 The Montreal Protocol on Substances that Deplete the Ozone Layer was agreed on 16 September 1987 and came into force in 1 January 1989. It featured a unique adjustment provision that enabled it to respond to new scientific information quickly with the use of adjustments which when agreed were automatically applicable to all countries that had signed the original agreement. (UNEP, 1987)
10 The principle was used to strike a political compromise in the United Nations Framework Convention on Climate Change in 1992 (UNEP, 1992)
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the Montreal Protocol, this move has not been universally welcomed. Alvin Leong (2014, p.1) argues “many developed countries object to such inclusion and take the position that CBDR is a principle that is limited to the field of environmental protection, and thus cannot be an ‘overarching principle’ for goals that seek to integrate the economic, social and environmental dimensions of sustainable development.”
Nonetheless the principle of common but differentiated responsibilities was seen as a major contributor to the success of the Montreal Protocol as by agreeing to take on a larger proportion of the financial burden the developed countries were able to assist developing countries through the implementation of the Multilateral Fund. Financial assistance was made available to developing countries to assist in the removal of ozone depleting substances from use and enabled all 142 developing countries to meet the 100 per cent phase out mark for ozone depleting substances by 2010 (Rae and Gabriel, 2012).
Notwithstanding the success of the Montreal Protocol this level of cooperation and commitment is unprecedented. This level of success can, in part, be attributed to the fact that there were clear achievable goals set as part of the protocol; the phasing out of ozone depleting substances created a straightforward objective, whereas agreeing and then implementing policies to address climate change is very complex and politically sensitive. It is difficult to reach agreement on what should be included in an international treaty,
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especially those concerned with climate change mitigation. Barrett (2007) argues this is because different countries are affected by climate change in different ways, with the poorest countries likely to be worst hit. Unfortunately it is these countries that can least afford the financial burden of mitigation measures.
However, it is through the aggregate effort of all countries that climate change will have to be addressed.
Externalities
The impact of climate change demonstrates the challenges posed by externalities in the production of a good if the costs or benefits are not reflected in the price. In this instance the direct cost of the good is transferred away from the organisations responsible for creating them and so there is no incentive to address the situation or add this calculation into the final cost of the good.
These externalities can be good or bad. Christopher Stone (1994) highlights the fact that even if goods, or services, have been privatised the external effects may still be displayed far from the geographical area in which they were produced, in a negative or positive way. For example a negative impact of warmer wetter weather, as a result of climate change, maybe the spread across borders of malaria carrying mosquitoes. Whereas, trees planted in one area may prevent flooding elsewhere. He argues that environmental inputs are incorrectly priced and therefore not valued, such as water, which is generally
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underpriced and as a consequence over-consumed and waste storage not priced correctly and thus often contributing to pollution.
The creation of the Multilateral Fund in the Montreal Protocol is an example of a situation where the externalities have been taken into consideration. It demonstrates an acknowledgement by the developed states that they had disproportionately benefitted from producing harmful greenhouse gases through their processes of industrialisation and the developing states had in many respects borne the consequences but been unable to mitigate them.
Despite this positive example the majority of externalities are not taken into consideration. Francisco Sagasti and Keith Bezanson (2001) argue that the fractured global order created through globalisation has increased the speed and broad reach of cross border externalities. The authors maintain (2001, p.iii) that an international response is required: “As the actions of one or more agents (governments, corporations, association and even individuals) create costs or benefits for other agents not party to the transaction and located far beyond national, institutional boundaries – and even across generations – narrowly construed domestic and local policy responses are clearly insufficient.”
It is this concerted effort that is required to address the wide-reaching challenges created by externalities, of which climate change is only one example. Kaul (2005, p.8) argues that extreme poverty may create “direct
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externalities such as the risk of failing states, exacerbated political turmoil and conflict, spread of communicable diseases, or interruption of commerce and investment flows.” The aggregate efforts of the international community will be required to address poverty in all its complexity, and thus prevent these public bads from spilling over borders and across generations. How to achieve the eradication of poverty has been at the centre of the development agenda for decades, with different policies implemented in different areas achieving mixed levels of success.
The problem of free riding is closely linked to externalities and is a problem inherent in the concept of GPGs according to Daniel Bodansky (2012). He argues that if states cannot be excluded from receiving the benefits of a GPG, then that good will be under-provided. Conversely, if a GPG is bad and produces negative rather than positive externalities, it tends to be over-provided.
The complex nature of externalities, even if a clear link can be made between an action and a consequence, means that they are serious challenges to the provision of GPGs. In addition the lack of incentive to remedy an issue, whether that’s the provision of a good, such as healthcare to stop the spread of a communicable disease, or a bad, such as a reduction in pollution that has crossed a state’s border, acts as a further disincentive for action, especially when that action requires financial commitment.
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