The Bali conference disappointed many people who hoped that delegates would agree to concrete steps for addressing climate change. Instead, delegates agreed to “consider” this and “address” that and to “consider addressing” this and that. It is certainly possible that eventually nations will enter a climate treaty. But in light of Bali, it is worth addressing a taboo subject—that an effective climate treaty is simply not possible.
There are several reasons for doubting that states will be able to agree to a climate treaty that mandates significant limitations on greenhouse gas emissions.
First, there is the simple but unavoidable problem of collective action. For climate change to be adequately addressed, it is not necessary for all states (and there are nearly 200) to agree to limit their emissions, but it is necessary for all major industrial and industrializing powers to do so. There are dozens of such states, and it is always difficult for a large group to cooperate.
Second, the various states that must cut their emissions have highly diverse interests. Some states (such as Russia) might not be harmed, might even be benefited, by global warming. Other states, such as India, will be greatly harmed. Some states (such as Sweden) have a long tradition of state control, which limits the political costs of regulating industry; other states (such as the United States) are more decentralized. Some states are rich, others are poor. Some states have effective governments, others do not. Some states rely on local energy supplies (such as natural gas) that do not contribute much to global warming (the UK), others (like China) have a large supply of dirty coal. Some states need rapid economic growth in order to maintain political stability; others do not. Some states have vibrant environmental movements and voters who have green sentiments; others do not. Some states have governments that accept and understand science; others do not. All of this suggests that a uniform set of commitments cannot be mandated; at a minimum, politically sensitive side payments will be necessary. Will it be politically possible to give massive subsidies to China, an authoritarian state with a bad human rights record and increasingly perceived as a global rival? What about Russia?
Third, limits on greenhouse gas emissions hit powerful interest groups—the energy business, the car industry, unions. Economically rational industry and union leaders will discount the future costs—no one will buy cars if all roads are covered by ocean—and look at the present. What are the interest groups on the other side? Environmental groups, and some technology companies that would benefit from government R&D subsidies and from regulations that raise cost for energy-dependent rivals.
Fourth, the benefits of a treaty will be felt in the distant future—50 or perhaps 100 years out. The costs are felt today. How likely are ordinary people living today willing to incur significant costs for the sake of people living in the distant future? Given that people in wealthy nations seem to care very little about the well-being of poor people living in poor nations (or even in their own nations) today, one might doubt that they would be very concerned about the well-being of people living in the future.
Fifth, the benefits are not salient, not politically visible, not of the type that normally motivates voters; whereas the costs are. The costs will immediately sting millions of people who must pay more money to power their cars and heat their homes. The benefits are floods, disease outbreaks, and military conflicts—that do not occur. All this means that there will always be a large and suspicious group of voters who cannot understand the science and do not see the benefits that higher gas prices are paying for.
Sixth, an effective climate treaty would be extremely complex and highly intrusive. A global cap-and-trade system would have to be set up, monitored, and enforced. States would have to be prohibited from evading the treaty by allowing people to hide their emissions from public view. In corrupt states, where basic property rights are often not respected, this seems likely to be difficult, unless other nations establish a strong presence, which seems impossible. But even in the case of rich states, we know that governments have come up with ingenious and complex schemes for creating hidden trade barriers in violation of the WTO rules; surely, they will do the same for a climate treaty. Some international body will be needed to prevent states from providing hidden subsidies to politically powerful industries that emit greenhouse gases in excess of quotas or permit regimes. All international bodies, by their very nature, are hard to monitor and controversial, as people fear losing control over their lives to remote international institutions over which their government can have only limited influence (think of anti-WTO protesters; why didn’t they show up in Bali, anyway?).
All of these considerations might seem theoretical, but the evidence tends in the same direction. It is impossible to think of an effective treaty regime that has surmounted all of the problems described above—or even more than one or two. The most effective environmental treaty (the Montreal Protocol) involved only a few major states, and for some of the states the benefits were felt almost immediately and were less than their expected costs (even on an individual basis). The Kyoto Protocol placed minimal burdens on the states that eventually ratified it (Russia was paid to ratify it; China was given no obligation; and Europe was given minimal obligations and may end up violating them anyway). Treaties that govern warfare and military tactics produce immediate gains as well as costs as soon as a war begins. The same is true for the international trade regime: trading states obtain immediate benefits (nondiscrimination against exporters) as well as costs (loss of the ability to protect import-competing industries). Human rights treaties, in principle, generate immediate benefits. So do all the treaties governing international transportation and communication; although highly complex, they are also self-enforcing and clearly beneficial. Most effective treaty regimes are relatively simple, avoid establishing international bodies with real powers, and involve a limited number of states with a long record of trust and cooperation. The single most effective and impressive treaty regime, the WTO system, was built up, incrementally, over a sixty year period, with many fits and starts and backward steps—and even today it is relatively weak, as the remedy for a WTO violation is simply an authorization to engage in self-help.