A Building Blocks Approach to
International Climate Policy
CAGE/CCCEP workshop, 25 January 2011
Dr Robert Falkner
Department of International Relations, LSE
CCCEP & Grantham Research Institute on Climate Change and the
Environment, LSE
Overview
Why a ‘building blocks’ approach?
1.
–
–
2.
Comprehensive, legally binding agreement unattainable; transition to
incremental regime-building under way.
Elements of building blocks approach.
Lessons from international cooperation
–
–
3.
Diversity of international regime designs and pathways.
Lessons from ozone and GATT/WTO negotiations; comparision with climate
change.
Making a building blocks approach work
–
–
Strategies
Risks
Dr Robert Falkner, LSE
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1. Why a ‘building blocks’ approach?
•
Failure to agree a comprehensive, universal and legally binding
climate treaty.
– Two decades of ‘Convention+Protocol’-type negotiations have failed to deliver
such a global deal.
– ‘Sovereignty hawks’ resist binding international rules; demands for legally binding
targets out of sync with domestic politics in key emitter countries (esp. USA).
– Balancing common and differentiated responsibilities a key hurdle.
•
A building blocks approach is already emerging.
– Kyoto Protocol as a stepping stone, but failure to set dynamic and long-term
targets; locks in strict asymmetry between Annex-I and non-Annex-I countries.
– Cancun 2010: beginning shift towards partial agreements in effort to keep
international process alive.
– Sub-global governance mechanisms (e.g. emissions trading in Europe, North
America) as building blocks; potential for scaling up?
Dr Robert Falkner, LSE
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Elements of building blocks approach
•
International climate policy as ongoing process; incremental process of regimebuilding.
•
Disaggregation of global deal: partial agreements on commitments and governance
instruments (e.g. ‘pillarisation’, ‘variable geometry’, ‘plurilateralism’)
•
Outcome resembles a ‘regime complex’; between fragmented governance and
coherent regime (Keohane/Victor).
•
Need to embed partial agreements and governance mechanisms in an international
political framework.
•
Key functions of UNFCCC system: universal representation; MRV standards;
interoperability of governance instruments; manage international funding.
•
But only second best strategy; comprehensive and binding climate regime remains
the long-term objective .
Dr Robert Falkner, LSE
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2. Lessons from international cooperation
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Factors preventing strong, legally binding, agreements
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Interest divergence
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Uncertainty re future costs and benefits
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Problem complexity and diversity
•
Considerable diversity in international regime designs
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Clubs vs. universal membership (OECD vs UN)
–
Different levels of hierarchy (UN Security Council vs General Assembly; World
Bank/IMF vs WTO)
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Hard vs soft compliance mechanisms (WTO vs MEAs)
•
Different pathways exist towards global governance
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Comprehensive multilateral negotiations (WTO Doha Round, UNFCCC)
–
Club agreement expanded to near-universal membership (1985 Vienna
Convention + 1987 Montreal Protocol)
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Soft law strengthened through hard law (e.g. ISO standards adopted in law)
–
Diffusion of public norms to private sector (IFC and Equator Principles)
Dr Robert Falkner, LSE
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Membership
universal
Varieties of international institutions
UNFCCC
Montreal
Protocol
2010
Kyoto
Protocol
WTO
2010
GATT
1986
APP
MEF
club
Vienna
Convention
1985
low
Montreal
Protocol
1987
GATT
1948
Legalization
Dr Robert Falkner, LSE
EU
ETS
high
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Case 1: Ozone depletion
•
Elements of a building blocks approach in ozone politics:
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Classic ‘global deal’ model, but includes important elements of building blocks
strategy.
–
Initial agreement by a small club of countries: Vienna Convention (1985)
originally signed by 21, Montreal Protocol (1987) by 25 countries.
–
Hierarchy within negotiations, reflecting oligopolistic CFC market: USA, UK,
Germany, France, Japan play key role.
–
Step-by-step expansion of initial agreement into a universal regime during
1990s; economic aid as inducement for key developing and emerging
economies (e.g. China, India).
Dr Robert Falkner, LSE
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Comparison with climate change
•
Interest convergence/divergence
–
Homogeneity of key players in ozone politics, unlike climate politics.
–
Broad agreement on the goal of ozone protection between major CFC
producers; negotiations focus on modalities of phase-out regime.
•
Equity concerns not a major stumbling block
–
North-South equity concerns not central to initial bargaining phase in ozone
talks; comprehensive regime in place before developing/emerging economies
join.
–
Limited economic aid (ca. $150m/year) sufficient to pay for CFC replacement
in developing countries.
Dr Robert Falkner, LSE
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Case 2: GATT/WTO
•
Elements of a building blocks approach in trade:
– Step-by-step creation of the international trade order through successive
negotiation rounds.
– Move from shallow (GATT) to ‘deep’ integration (Uruguay Round + WTO).
– GATT as second-best option for regime-building, after failure of ITO.
– From club to near-universal WTO (23 GATT signatories; 153 WTO members).
– Hierarchy within a regime of equals: key leadership role of ‘Quad’ and Group of
Seven/Eight in GATT rounds; ‘new Quad’ in Doha Round (US, EU, India, Brazil).
– Parallel creation of regional and bilateral trade agreements; forum shifting a
threat to multilateralism, but also a case of managed complexity.
Dr Robert Falkner, LSE
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Comparison with climate change
•
Reciprocity in bargaining:
– Reciprocity essential to success of GATT/WTO negotiations; trade agreements
create excludable goods.
– Main benefit of climate governance is a non-excludable good (climate stability);
need to develop excludable goods from climate policy (e.g. emissions trading;
beneficial trade treatment; access to finance and technology).
•
Domestic support:
– Trade liberalization shifted domestic ‘balance of power’ in favour of pro-trade
interests (MNCs).
– Climate governance is slowly creating pro-regulatory business interests (e.g.
clean energy technology, emissions trading), but insufficient to change domestic
dynamics in the short run (e.g. USA).
•
Time frame:
– Developing the GATT into the WTO took nearly half a century…
Dr Robert Falkner, LSE
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3. Strategies for a building blocks approach
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Identify appropriate small groups for partial agreements
– create conditions for reciprocity between key negotiation parties
– Innovative combinations of major emitters and regional representatives
– Focus on country grouping based on sectoral agreements
•
Create excludable goods (e.g. trading, technology, funding)
– to create incentives for parties to engage in negotiations and join partial
agreements
•
Strengthen monitoring and information exchange
– to encourage compliance with non-binding mitigation targets
•
Environmental leaders to provide stimulus
– for setting high level of ambition (e.g. EU’s emissions targets)
– for developing and expanding innovative instruments (e.g. emission trading)
– for technological innovation and diffusion (e.g. CCS)
•
Reduce carbon leakage in an uneven regulatory environment
– E.g. through border tax adjustment
Dr Robert Falkner, LSE
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Political risks
•
Strengthen veto power of major emitters
– If key demandeurs for emission cuts are likely to be excluded from small group
settings, would this lower the level of ambition?
•
Loss of linkage opportunities
– Comprehensive package deals allow for trade-offs across different issue areas;
disaggregation of regime-building may make such deals more difficult.
•
Further erosion of trust
– North-South: developing countries have long opposed moves to plurilateralism
as it undermines their bargaining position over international climate funding etc.
– Transatlantic: Long-standing European suspicion over US advocacy for small
group settings (e.g. Bush & APP).
•
Strategic dilemma
– How to prepare the ground for a building blocks strategy without undercutting the
long-term ambition of creating a comprehensive, universal and legally binding
regime?
Dr Robert Falkner, LSE
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