Negotiating Effective International Environmental Agreements: Is an Objective Approach to Differential Treatment Possible?

Abstract

The negotiation of international environmental agreements is rendered less effective and more costly than necessary on account of the incentives for rent seeking. This article argues that the problem of rent seeking in this context is complicated by the legitimate demand for the differential treatment of relevant heterogeneity, when insufficient information is available to distinguish between demands based on legitimate differences and rent-seeking. In order to reduce the overall costliness of the totality of international resource agreements, the general rule should be that differential treatment should be provided only in exceptional circumstances. A corollary to this rule is that differences that do not affect future negotiating costs may be considered in current negotiations. This points to differences that are exogenous to the bargaining process, such as a country's physical location. It is argued that development status of a country is another such factor, since the incentives to pursue development are unlikely to be affected by its recognition in current negotiations. Furthermore, the failure to recognise development status as a legitimate basis for differentiated treatment implicitly rewards the early identification and exploitation of unmanaged resources. Restriction of differential treatment to a small number of such differences enables the focusing of negotiations, and the structuring of discussions. A case study of the Montreal Protocol illustrates how the differential impacts of a uniform standard may be estimated, once the range of impacts is delimited.