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Two principal conclusions can be made from the preceding analysis: first, for environmental problems involving only a few countries, international cooperation should be capable of increasing total net benefits significantly, although this is by no means assured, and, second for environmental problems involving a great many countries, international cooperation is sustainable only when the gain in net benefits from cooperation is small. This final chapter draws some implications of these conclusions for the agreements considered in Chapter 2 (p. 7).
The North Pacific Fur Seal Treaty involves just four countries and is an example of an IEA that has proved successful (Lyster, 1985). Fur seals breed on both Russian and United States territory but spend much of their time in the high seas. The seals were hunted extensively in the nineteenth century and nearly became extinct around the beginning of the twentieth century because of the increase in the inefficient practice of pelagic sealing - the harvesting of seals in the water- by both Canada and Japan.
In 1911, the North Pacific Fur Seal Treaty was signed by the United States, Russia, Japan and the United Kingdom on behalf of Canada. The agreement has four remarkable components.
First, it bans pelagic sealing. In doing so, the agreement stops wasteful harvesting and ensures that all harvesting is carried out by Russia and the United States, who have an incentive to manage their own breeding populations efficiently. In other words, the agreement replaces "open access" exploitation with "sole owner" exploitation.
Second, the agreement compensates Canada and Japan by requiring that Russia (later, the Union of Soviet Socialist Republics) and the United States give a portion of their annual harvest to the two countries. The 1957 Treaty requires that the United States and the Union of Soviet Socialist Republics gave Canada and Japan 15 percent of their annual harvest of pelts.
Third, the Treaty allows authorized officials of each signatory to board and search vessels of other signatories suspected of pelagic sealing in its own territorial waters or in international waters and to seize or arrest the vessel and its crew if the official boarding the vessel has "reasonable cause" to believe that the vessel and crew have violated the prohibition.
Finally, the agreement states that in the event of a violation, and provided signatories cannot agree to "remedial measures", any signatory may give notice of its intention to terminate the agreement. The whole of the agreement would then be terminated nine months later. This is a very strong punishment, for if the agreement were terminated, exploitation could be expected to revert to open access, with all countries losing. Since each signatory must be better off with the agreement than without it, this mechanism provides a strong incentive for full compliance.
Similar mechanisms to punish free riding exist in other agreements, such as those to control locusts. As noted earlier, one country has little incentive to control locusts within its own borders if its neighbours do not reciprocate. Hence, a strong incentive seems to exist for countries to revert to their noncooperative outcomes if their neighbours do as well. In other words, harsh punishments against free riders would seem to be credible.
The Agreement for the Establishment of a Commission for Controlling the Desert Locust in the Eastern Region of its Distribution Area in Southwest Asia was negotiated and signed by Afghanistan, India, Iran and Pakistan. A termination clause states that the agreement "shall be considered terminated if and when the number of Members of the Commission falls below three, unless the remaining two Members of the Commission decide to continue, with the approval of the Conference of the Organization."
Interestingly, the Agreement for the Establishment of a Commission for Controlling the Desert Locust in Northwest Africa, which was open for signature to Algeria, the Libyan Arab Jamahiriya, Morocco and Tunisia "and the countries adjacent hereto" and was signed by the four named countries, contains exactly the same clause. So does the Agreement for the Establishment of a Commission for Controlling the Desert Locust in the Near East, which was open for membership to more than ten countries and signed by l 4. Perhaps it may not have been credible for this last agreement to impose a harsher punishment, despite the larger number of countries involved.
Although care must be taken in drawing inferences from the theory, it is perhaps worth noting that one of the functional specifications shown in Table 3 suggests that the self-enforcing IEA consists of three countries.
The Plant Protection Agreement for the Southeast Asia and Pacific Region, signed by 22 countries, is automatically terminated when the number of parties to the agreement becomes "fewer than three". The agreement establishes a committee that may make "recommendations" to signatory governments regarding "prohibition, certification, inspection, disinfection, disinfestation, quarantine, destruction or other measures." Each signatory is required to "use its best endeavours to apply with respect to the importation of any plants, including their packings and containers, and any packings and containers of plant origin, from anywhere outside the [region covered by the agreement], such measures ... as may be recommended by the Commmittee ...". The committee is made up of one representative of each signatory, and its decisions are taken by a majority of votes cast. In other words, the committee set up by this agreement has significant power.
The International Plant Protection Convention, signed by 81 countries, does not specify a minimum number of signatories. This agreement is weaker than the regional agreements, however, because it calls only for the establishment of national plant protection organizations with the authority to issue a standard phytosanitary certificate and to regulate the entry of plants and plant products. These requirements are so weak that they do not provide a strong inducement for accession. The Convention for the Establishment of the European and Mediterranean Plant Protection Organization, signed by 31 countries, also carries fairly weak obligations and includes no provision for termination.
As noted earlier, fisheries agreements generally provide for both cooperative research and regulation. According to Caldwell (1984, p. 34), these IEAs have been more successful at research than at regulation:
"International cooperative efforts in fisheries research have enjoyed moderate success; difficulties arise when regulatory measures for the conservation of fisheries are proposed. The historical experience has been that freedom of the seas and national rights are invoked to cover the immediate economic interest of the fisheries industries, as in the Cod Wars (1952-76) between Iceland and Great Britain."
Caldwell (1984, p. 35) adds:
"With the exception of the North Pacific Fur Seal Convention, a plausible case could be made that, had none of the international conservation agreements negotiated prior to 1970 been consummated, the state of fisheries and world wildlife generally would not have been significantly different."
It is true that most fisheries agreements impose weak requirements upon signatories. The Agreement for the Establishment of a General Fisheries Council for the Mediterranean, for example, facilitates cooperative research but no management regime.
Some agreements do seem to influence fisheries management to some degree, however. The International Convention for the High Seas Fisheries of the North Pacific Ocean, negotiated by the United States, Canada and Japan, allows its commission to "recommend necessary joint conservation measures" and actually bans fishing of certain species in certain areas by Japan in one case and by Japan and Canada in another. This agreement ceases to remain in force if any one of the parties withdraws.
The Convention for the Conservation of Salmon in the North Atlantic Ocean, signed by seven countries plus the European Community, bans salmon fishing outside territorial waters and establishes a conservation organization, comprised of a council and three regional commissions, which may make recommendations concerning fisheries management. But the powers of the council are limited. For example, Article 4 of the convention states:
"The Council shall have the authority to make recommendations to the Parties and the Commissions on matters concerning salmon stocks subject to this Convention, including the enforcement of laws and regulations, provided that no recommendation shall be made concerning the management of salmon harvests within the area of fisheries jurisdiction of a Party". (emphasis added)
Perhaps the greatest challenge to the theory developed in Chapter 3 is the Montreal Protocol. Like the North Pacific Fur Seal Treaty, this agreement is remarkable in a number of respects.
First, it imposes what seem to be quite harsh obligations. Under the June 1990 revisions, signatories must essentially ban 20 "ozone-depleting substances" by the end of the century. Second, the rev ised protocol establishes a fund that channels resources to developing-country signatories in order to compensate for the "incremental costs" of complying with the agreement. Third, the agreement prohibits trade in CFCs, products containing CFCs or products made using the banned substances. The agreement, therefore, ensures that abatement by signatories is not offset by imports from nonsignatories. Furthermore, non-signatories are provided with an incentive to accede to the agreement.
Unlike the North Pacific Fur Seal Treaty, however, the Montreal Protocol deals with a global environmental problem. The theory presented in Chapter 3 suggested that an IEA may be signed by many signatories, each agreeing to undertake substantial action, when the gap between the non-cooperative and fully cooperative outcomes is very small (Barrett, 1992b). Evidence suggests that this gap is small in the case of ozone depletion. First, a number of countries took unilateral action years before the Montreal Protocol was adopted.The United States, for example, banned the use of CFCs in aerosols in the late 1970s. Second, a cost-benefit analysis carried out by the United States Environmental Protection Agency in 1988 estimated that the benefit to the United States of participating in the Montreal Protocol would be US$3 575 000 million, while the costs of participation would be only US$2 1 000 million. Clearly, the incentives to participate were overwhelming for the United States, and it must be emphasized that United States costs of participation are likely to be high because of the unilateral action it took previously. Most important, this same study estimates that the benefits to the United States of undertaking the obligations of the Montreal Protocol unilaterally were US$ 1373 000 million compared to US$2 1 000 million in costs. Thus, it was certainly in the interest of the United States to carry out the terms of the Montreal Protocol whether or not other countries did likewise. In other words, the Montreal Protocol, although seeming to have attained very substantial cooperation, may not have achieved much more than would have been realized in the non-cooperative outcome.
Taken together, the theory developed in Chapter 3 (p. 21) seems to be supported by the evidence. The success of international cooperation depends largely on the ability to deter free riding. When few countries exploit a resource, free riding can be effectively deterred. When the number of countries involved is large, however, free riding is much more difficult to prevent.