A Global Environmental Organization?

As proposed by Edward Gresser in the latest issue of Democracy:

Rather than require each country to be the arbiter of all the others’ compliance by default, the solution must be to create an institution to do the job. The goal should be to ensure that the Copenhagen negotiations generate not only an effective and fair emissions-reduction agreement, but also an institutional structure that can make sure it is implemented—and in doing so bring environmental policy into line with security, trade, labor, and finance, as a field in which institutions and rules ease policymaking and improve its enforcement. In other words, we need a global institution modeled on the sort of organizations that have served the world for the last 65 years: The UN, the IMF, the World Bank, and the WTO.

It's an excellent idea, especially given the myriad enforcement problems associated with any future climate change treaty, including the ones I mentioned yesterday. Gresser is wise, however, not to assume that a GEO will solve every international environmental problem, but it could ease the process by which countries deal with them.

One other virtue of a GEO, separate from the other major international institutions, is that it could help win some legitimacy in the eyes of developing countries for vigorously reducing carbon emissions on their part. Consider a second-best alternative to a GEO, namely adding environmental policy to the portfolio of existing successful institutions -- the WTO would handle climate-related trade policy, the World Bank would help with financing clean energy technology and adaptation programs (moreso than it already does, at least), etc. Developing countries, however, tend to have a strong distrust of those bodies, which they consider to be disposed against their interests; would they accept WTO rulings upholding carbon tariffs, say? This is already playing out in the negotiations in Bangkok over a new climate fund for developing countries: The US had wanted, among other things, for the fund to be administered by the World Bank, which was flatly opposed by the developing country bloc. The US seems to be softening its position on this, however, but the debate shows how important it is for developing countries to feel that international institutions are on their side.

Of course, Gresser's GEO applies not only to climate change, but to all the existing environmental treaties, where enforcement has been, for the most part, abysmal. Even apart from climate change, I think it would be worthwhile to get some proper enforcement mechanisms in place for those treaties.

Feed the Tree

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Recently, I've blogged about climate change (I know!), the rise of organized crime around the world, and the need for better governance, both in this country and abroad. So why not have a post that combines them all together?

From the Guardian:

Interpol, the world's leading policing agency, said this week that the chances were very high that criminal gangs would seek to take advantage of Redd [Reducing Emissions from Deforestation and Degradation] schemes, which will be largely be based in corruption-prone African and Asian countries.

"Alarm bells are ringing. It is simply too big to monitor. The potential for criminality is vast and has not been taken into account by the people who set it up," said Peter Younger, Interpol environment crimes specialist and author of a new report for the World Bank on illegal forestry.

"Organised crime syndicates are eyeing the nascent forest carbon market. I will report to the bank that Redd schemes are open to wide abuse," he said.

I'm not as knowledgeable about the details of REDD as I am about other aspects of carbon markets, but as with other carbon offset programs, there are serious questions about how to monitor and verify that reforestation and anti-deforestation projects are resulting in actual, permanent emissions reductions. That said, it's important to separate the question of the value of REDD in itself from the question of corruption and organized crime in countries where REDD projects are likely to be concentrated. It should go without saying that stable governance that is free from corruption is a good thing in itself; but it also has the side benefit of making it easier for developed and developing countries to cooperate on matters of global import, like climate change. This is one instance where it's helpful to break out of the policy silo mindset, which is all too easy to slip into.

At the same time, we in the West can't wave a magic wand and wipe out all the criminality and corruption in places like, say, Indonesia (which cleared 28.1 million hectares of forest between 1990 and 2005 and in 2008 was rated 126 on Transparency International's Corruption Index). We can, however, insist on high standards of quality for international offsets of all types, including REDD, thereby creating incentives for countries generating offset credits to root out fraud. Let us hope, then, that the offset provisions in the Kerry-Boxer climate bill in the Senate are preserved.

Emissions Trading: A Frankenstein's Monster?

Aw, would you listen to the gibberish they've got you saying, it's sad and alarming! You were designed to alert schoolchildren about snow days and such.

-- Professor Frink, The Simpsons

So some of the economists who invented the concept of pollution emissions trading, including Thomas Crocker and the late John Dales, were profiled in the WSJ recently as being against the use of emissions trading to fight climate change. Such an event has an obvious man-bites-dog element to it, but it's worth noting that the specific objections that these éminences grises have to using cap-and-trade for climate change are rather pedestrian: According to the article, they argue that 1) cap-and-trade was designed to handle local pollutants like sulfur dioxide, not global pollutants like carbon dioxide and methane; and 2) uncertainty about the costs of climate change make it hard to determine a cap on emissions, and changing the size of the cap to comport with new data would be difficult. Instead, Crocker and David Montgomery, another progenitor of emissions trading, recommend using a carbon tax.

On both of these, I'm with John Whitehead: The problems with actually existing cap-and-trade programs -- which is what Crocker, et al are describing -- would likely prevail with actually existing carbon tax programs. In fact, I would go further and say that the thing we need most is not this or that mechanism for reducing carbon emissions, but institutions capable to recognizing the threat posed by climate change and acting decisively on it. The rules of the US Senate arguably matter as much as the particular structure of a US cap-and-trade system that it would consider. Internationally, negotiations on climate change reflect the state of international institutions as a whole: Often efforts to act on global issues devolve into acrimony between the developed and the developing countries -- or between the US and everyone else -- and to the extent consensus is reached, there is no internationally recognized authority to enforce agreements.

This is why the negotiations in Congress over health care reform have been so depressing: Despite a clear need for change in how we finance health care, and a majority in both chambers in general support of a plan to do that, legislation is still being held hostage by the whims of Max Baucus and the now-routine use of the filibuster. And yet, the system does at times work swiftly -- if you're an investment bank or an agribusiness giant. If you can't get health insurance, or you live in a poor country at risk of climate change-induced drought or flooding, not so much.

Constituencies

The Windy recently published a fascinating piece on the embattled Office of Thrift Supervision, which ostensibly regulates savings and loan banks but in recent years has been more notable for failing to identify problems in such companies as Washington Mutual, IndyMac, and Countrywide as they each went down in flames. It seems that OTS, which many in Washington would like to see abolished, has been gaining support from insurance companies eager to purchase failing thrifts in order to qualify for some of that $700 billion in bailout money.

What's interesting about this, for me, is comparing OTS to another banking regulator that's been making headlines recently, the Federal Deposit Insurance Corporation. There are obviously many differences in what both agencies do, but one major difference is who they identify as their primary constituency: Whereas the FDIC, as the name implies, sees itself as protecting the interests of individual depositors, OTS is notorious for having "overly close identification with its banks," as the Washington Post put it in their investigation of the agency.

This question of constituency -- to whom a government office feels itself most beholden -- is a really important one and really underappreciated. Ezra Klein, for example, frequently draws attention to the fact that the Department of Agriculture sees itself as representing the interests of food producers -- i.e., farm states and agribusiness -- rather than food consumers -- i.e., everybody else. It's no surprise, then, that the USDA is more supportive of policies that subsidize food producers rather than ensuring that Americans are getting an nutritionally adequate diet.