Governing the Global Commons Aaron Maltais Department of Government Uppsala University

The Card Game Each player is given two cards: one red and one black Each player will anonymously hand in one card to the collective pot Payoff to each student after game play: – 5 kr for a red card in your hand – 1 kr to every player for each red card Center holds Your task: figure out what to hand in to the collective

Public goods and common pool resources Non-rivalrousRivalrous Non-excludable Public goods Defence, law and order, weather forecasts, benefits associated with reductions of air pollution. Common pool resources Transboundary ocean fishery, the atmosphere’s protective functions Excludable Club goods Patented knowledge (legal exclusion), cable television (technical exclusion) Private goods Food, computers, cars

Common Pool Resources Exclusion is impossible or difficult and joint use involves subtractability Non-Excludability: – Ability to control access to resource – For many global environmental problems it is impossible to physically control access Subtractability: – Each user is capable of subtracting from general welfare (removing fish from a shared stock or adding pollution to a shared sink) – Inherent to all natural resource use

“The Tragedy of the Commons” Article published in 1968 by Garrett Hardin. A shared resource in which any given user reaps the full benefit of his/her personal use, while the losses are distributed amongst all users. If there is open access to the resource the result of individual rational choices is a collective tragedy of unsustainable depletion.

The absorptive capacity of the atmosphere is a common pool resource 1.The benefits from emitting are enjoyed by emitters while environmental costs are shared globally and over generations. 1.Emissions reductions are a public good: – They are enjoyed by all irrespective of contribution. – Enjoyment of the benefits does not subtracts from others enjoyment of the same benefits.

Negative externalities

Free-riding

What the state can do Ensure public financing for national defense - taxes, laws and penalties that make non-cooperation unattractive. Limit access to a common pool resource (e.g. fishing quotas). Turn common resources into private property.

International Environmental Agreements Do countries behave selfishly and continue to pollute? Does mutually beneficial cooperation take place between independent states? What can be done to increase the chances of cooperative behaviour? Over 900 multilaterals 1500 bilaterals Over 900 multilaterals 1500 bilaterals

Oil Pollution at Sea and The International Convention for the Prevention of Marine Pollution (MARPOL)

Migratory Ocean Fisheries - International Commission for the Conservation of Atlantic Tunas (ICCAT)

Source: Nasa, Ozone Depletion without the Montreal Protocol

Source: Nasa, Projection of real world ozone recovery

(Perceived) Payoffs to US with and without Montreal Billions of 1985 US$ Montreal Protocol Unilateral Action without Montreal Protocol Benefits3,5751,373 Costs21 Net Benefits 3,5541,352 Source: USEPA (1988), reproduced in Barrett (1999)

What will give us a 50% chance of 2°C? CO2 emissions must be half of current levels by On current trajectories CO2 emissions will be 40% greater than current levels by 2030 (IEA, 2010: p. 61)

What we need to do

What we need to build

When we need to do it

OZONE DEPLETIONGLOBAL WARMING Positive for international cooperation Negative for international cooperation 1. Number of actors 2. Location of damages and mitigation costs 3. Timeframe of impacts 4. Certainty about benefits from mitigation. 5. Natural Leaders 6. Technical/Infrastructural complexity and costs A few key actors and a limited number of industry players Several important actors and virtually all major industries Tend to coincide territorially Tend to diverge territorially The United States No Near term benefits from mitigation Benefits far off into the future High, unknown, and expensive Low, known, and inexpensive Less positive - much more uncertainty Exceptionally positive - high level of certainty

The international climate regime Contentious negotiations Very weak emissions targets Non-participation of many states Lack of enforcement mechanisms Failures to meet targets Non-binding commitments Delaying of meaningful emissions cuts/investments to the future

Short timeframe for action: Delay makes future mitigation efforts much more costly. Delay locks us into polluting energy structures. Delay increases the severity of future climate impacts. Delay increases the risk of nonlinear climate disasters. Governments will predictably be faced with hard choices about investing in short‐term measures to deal with major climate impacts versus long-term mitigation. Overshooting safe emissions budgets strengthens preferences for short-term interests over long-term mitigation.

On the plus side The amount of GHG we can emit is highly scarce but energy need not be. Limiting global warming to some safe range appears to be technologically feasible and well within economic means. Individuals, organizations, states and the international community have already taken some costly, although inadequate, steps.

OZONE DEPLETIONGLOBAL WARMING Positive for international cooperation Negative for international cooperation 1. Number of actors 2. Location of damages and mitigation costs 3. Timeframe of impacts 4. Certainty about benefits from mitigation 5. Natural Leaders 6. Technical/Infrastructural complexity and costs A few key actors and a limited number of industry players Several important actors and virtually all major industries Tend to coincide territoriallyTend to diverge territorially The United States No Near term benefits from mitigation Benefits far off into the future High, unknown, and expensive Low, known, and inexpensive Less positive CBAs and much more uncertainty Exceptionally positive cost/benefit assessments

I am suggesting two propositions – Achieving anywhere near half our goals will create the technological, industrial, and infrastructural capacity to fully reform our energy structures. – If we do not develop these technological/infrastructural capacities people will not be motivated to radically reduce their emissions.

What really really matters is to: Avoid delay in emissions reductions Act now to demonstrate that high welfare is compatible with rapidly declining GHG emissions

The need for leadership Developing, demonstrating and deploying low-carbon technologies. A hard problem combined with uncertainty is toxic. Extensive practical uncertainty on alternative energy structures. Current investment billion US dollars per year. Needs to rise rapidly to US 750 billion per year by 2030 and again to US 1.6 trillion per year between 2030 and What is at stake is the need for a rapid and sustained increase in our efforts by a factor of four to ten over decades.

Do Ostrom’s conditions for voluntary governance apply? (i) use of the resources can be easily monitored (ii) rates of change in resources are moderate (populations, technology, and economic and social conditions) (iii) frequent face-to-face communication and dense social networks (iv) outsiders can be excluded at relatively low cost (v) users support effective monitoring and rule enforcement.