Why We Need An International Climate Organization
It’s about incentives.
After decades of negotiations and underwhelming international treaties, the IPCC has confirmed we will heat the earth by 1.5 degrees Celsius. That is now a given. But scientists say that after 2050, things could get better — only if we get our house in order.
There are a couple of reasons why we’re failing to solve this problem, and it’s not because too few people recycle or drive electric cars to work.
The first is something called the ‘The Prisoner’s Dilemma’. More or less, this means that it makes more sense for people in a situation to be selfish than to cooperate, at least in the short run. The current international approach to climate change does not address the fact that many nations consider themselves immediately better off when skirting carbon emission caps. And they’re not wrong.
For now, it makes money to pollute.
The way that international climate treaties are structured, like the Paris Climate Agreement, doesn’t help. There is no legal bound to keep your word on carbon emissions. Countries set their own goals. If they don't meet them? A collective “oh well” is uttered throughout the global community.
This has been the normal course for a long time. With the current strategy, it’d be impossible to create a Paris Agreement with binding restrictions because few nations would sign it. It isn’t worth the risk for many of these countries, plus it’s hardly politically feasible.
A second reason is that the consequences of climate change are too removed for those polluting the most. Although the Maldives may be facing an existential threat by rising sea levels, the average American citizen is not.
When the consequences of our changing climate (aside from smog) finally do touch the farmer in Iowa or the banker in Shanghai, it will be too late. The recent flooding in China’s Hubei province may turn some heads in Beijing, but whether that is enough to halt the construction of all future coal power plants isn’t likely.
It just doesn’t hurt enough right now for the major players to change the way they live.
International climate policy today is trying to make a change in a system that is rigged to work against it. Only by changing the incentives can this shift.
This two-pronged policy strategy can make a significant impact on our carbon emissions.
- The first is a local shift — on a national and subnational level. We can implement what we call ‘pigouvian’ taxes on wasteful products like single-use plastics and major carbon-emitting industries. The revenue of these taxes could be funneled into green subsidies and carbon-reduction research and development.
Of course, a major issue is the political feasibility of these policies at home. Plus, climate activists have been calling for these for a very long time — and they mostly haven’t been done. That is why shifting the international incentives structure can actually improve the political optics on a local level.
2. This can be done through an international climate institution, modeled on the World Trade Organization — a hugely successful creation that shifted the incentives of international trade. This climate institution would establish a set of structures that encourage carbon emission reduction.
For example, a nation could receive tariff rebates in tandem with the percentage of electricity they produce by renewables. As the percentage increases, so do things like trade or other incentives.
Much like the Green Climate Fund, a green investment endowment can act as a carrot to interested governments. If a country makes credible, concrete policy changes to shift to a greener economy, that nation can then receive access to that fund to help its shift.
Countries refusing to make the changes sit on the sidelines with no access to this cash.
An organization with goals as ambitious as these could even start small.
The General Agreement on Tariffs and Trade, the predecessor to the World Trade Organization, started with only 23 member states. As the organization slowly grows, it becomes more desirable to join the club — the green fund increases, as do trade benefits and other incentives.
It is conceivable to get wealthier economies like those in the EU, Canada, or New Zealand to sign on, as they’re already making comparable, earnest attempts to green their societies. Developing countries, a particular concern to the climate as they industrialize, would be incentivized to join the organization due to the financial, technological, and diplomatic incentives the body provides. If the USA and China don’t join initially, the world’s biggest polluters could be pressured or compelled to join, either by internal pressure or pure financial allure.
In order for this body to be effective, self-reportage like that in the Paris Agreement won’t work. Internal monitoring and a bureaucracy must be established to ensure member states are complying with carbon reduction initiatives. When the stakes are so high, this should be expected.
Although difficult to initially construct, an organization like this deals with the prisoner’s dilemma. It wouldn’t make financial sense to cheat. If we can create an organization that penalizes non-cooperation and has financial incentives that outweigh free-riding, huge gains can be made. In fact, that local-level climate policy could even be in the interests of the politically powerful.
This idea is admittedly barebones, but a shakeup is necessary. The unfortunate reality is that on our current course, the international community will only change when the consequences are bad enough, i.e. when they’re irreversible. Or, we can create an atmosphere where it doesn’t make sense to kick this can down the road.
