Climate:

Climate expert Barrett says incentives, not enforcement, way forward on international policy

As the world's largest emitting countries get ready to meet next week at both the United Nations and the State Department, many questions remain as to how best to approach a post-Kyoto climate strategy. During today's OnPoint, Scott Barrett, professor and director of the International Policy program at Johns Hopkins University and author of the new book, "Why Cooperate? The Incentive to Supply Global Public Goods," explains the role incentives should play in an international climate strategy. Barrett previews next week's international climate discussions and makes recommendations for a post-Kyoto agreement.

Transcript

Monica Trauzzi: Welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Scott Barrett, professor and director of the International Policy Program at Johns Hopkins University. Scott is author of the new book "Why Cooperate; The Incentives to Supply Global Public Goods." Thanks for coming on the show Scott.

Scott Barrett: Thank you for having me.

Monica Trauzzi: Scott, in your new book you take a look at the major threats facing us on a global scale and the impact they might have on our lives if they're not addressed. Explain for our viewers what global public goods are and how climate change fits into that discussion about global public goods and incentives.

Scott Barrett: Well, global public goods have two key attributes. The first is that when they're supplied for anyone, any country, they are available for everyone, every country. And the second is that no country can be excluded from benefiting from the global public good. And the reason that second property especially is important is that if the good is provided and you can be excluded from enjoying it, then your incentive to supply it may be muted. It may be low. So global public goods are both very important, but also can be very difficult for the world to supply. With climate change there are actually a number of aspects of climate change that represent global public goods. The first one, of course, is what we call mitigation, just reducing the concentration of greenhouse gases in the atmosphere. Those actions are global public good because the greenhouse gases mix uniformly in the atmosphere. And if one country cuts back on its emissions to reduce those concentrations every country would be affected and most countries will benefit. So, that's one key aspect and that's also why we have to have an international agreement on doing this. And because of that incentive problem I mentioned that's why it's been so difficult for us to have an agreement that's effective.

Monica Trauzzi: Let's talk about an international agreement. We're seeing a lot of interest in the climate discussion right now and momentum is starting to gain about what we're going to do for a post-Kyoto treaty. Several meetings are scheduled next week already to discuss different options. What are the main lessons learned from Montreal and Kyoto that we need to apply in the future if we want to create something successful?

Scott Barrett: Well, the global public goods of protecting the ozone layer, which is what the Montreal protocol is meant to address, and mitigating climate change, those are global problems that require global solutions. And both of those global public goods have attributes that make provision very, very difficult. The absolutely key thing to understand about those two problems is the need for enforcement. Now, enforcement means you not only agree that we should all do something, but that you actually create the incentives for countries that follow through. And the big contrast between the Montreal Protocol and the ozone layer and the Kyoto Protocol for climate change is that the Montreal Protocol included incentives for countries to supply that global public good and the Kyoto Protocol does not.

Monica Trauzzi: Okay, so you're talking about the importance of incentives. President Bush is pushing for aspirational goals, for an international treaty. Is that something that you think will get us on the right track? Should the next round of international discussions be focusing on voluntary efforts as opposed to mandatory efforts?

Scott Barrett: Well, you know, I have aspirational goals for myself every single day and I often let myself down. I think being aspirational is very important and I think it's important for our leaders to layout visions for our own country and for others. But it's funny that we don't rely on aspirational goals to address a lot of fundamental global problems, but for some reason we think that's sufficient for climate change. It's not sufficient. I think one resorts to mentioning aspirational goals when one hasn't figured out just what exactly needs to be done and how we can make that happen, how in particular we can address this key need to create the incentives for countries to change their behavior. So that's the thing that's really missing.

Monica Trauzzi: And how do we do that?

Scott Barrett: Well, it's actually very hard I'm sorry to say and people want simple answers. And the one thing, I've worked on climate for almost 20 years, and I'm impressed when people seem to have very simple solutions to this problem because it actually is immensely complicated. One thing to understand, if you look at the Kyoto Protocol as our starting point, and I think the most important thing about Kyoto right now is that we learn from the experience. This is a centuries-long problem and we shouldn't be too impatient. The key lesson, I think, from Kyoto is that it's not enough to express targets. It's not enough to say that you're going to meet them. You have to change incentives. Now actually, in Kyoto, the idea of trying to change incentives was introduced after the Kyoto conference in subsequent negotiations. And those changes that were brought into the agreement unfortunately won't change behavior and the basic reason is that it's easy for countries to get around them. The thing to bear in mind is that we have about 200 countries in the world. Now, it's not true that all 200 are essential for addressing climate, but you do need a lot of them. And the U.S. is important, but it's not big enough to do it on its own. China is important, but even the China and U.S. together are not enough. So you need to build up a critical mass and then you need to figure out a way in which they not only can agree on what to do, but that they create these positive incentives for good action to be rewarded with yet more good action by other countries. And the reverse also, that countries that fall down and don't do what they agreed to do are punished for it. And one agreement to think of as a model is the Montreal Protocol, but another one that I think your viewers will be familiar with is the World Trade Organization. And the General Agreement on Tariffs and Trade is actually structured exactly like this. It creates incentives for countries to abide by the rules. And that's what we need for a climate agreement.

Monica Trauzzi: So, does hosting a wide variety of meetings actually hurt the process then? Are there going to be too many ideas floating around at the end of all this?

Scott Barrett: You know, I think we can't have too many ideas float around and I think this is a very important time for us to gather our thoughts and rethink this whole problem. Part of the difficulty with climate is that so many people jumped on the bandwagon for a solution so early that they really crowded out other ideas and it was unfortunate. So we went down this route that really resulted in the Kyoto Protocol and I think some of the problems with that agreement are starting to appear. But now is a very, very good time for the world to collect its thoughts and to rethink this problem. Another aspect of this that's very important is that there are multiple dimensions to the climate problem and these other dimensions also have global public good features and we need to get the world to cut back on emissions. Actually, the way to think about that seriously is you need to transform technology worldwide and this is something that we've never done. This is not about the market doing it, bubbling up; this is going to require leadership from key countries to create the incentives for the market to be able to play its part. The need for technology is fundamental and, of course, the Bush administration has emphasized technology. But you have to backup your interest in technology with real incentives that create the drive for innovation and then to think about how to spread that renovation worldwide because that's the only way in which we're going to cut greenhouse gas emissions substantially.

Monica Trauzzi: Does the fact that the U.S. doesn't have its own climate policy in-house, does that affect things? Or can a global policy sort of help the U.S. along into creating its own national policy?

Scott Barrett: That's a very good question. The U.S. will not be brought along by global process, certainly to do something like to cut emissions. Our structure, our legal system, our constitution is not really suited to that in the way that a parliamentary democracy is. Furthermore, you have the background of the United States having already participated in the Kyoto talks, having signed that agreement, and then basically having walked away. And I think it is absolutely essential for the legitimacy of the United States, the honest issue, and in foreign policy more broadly, for the United States to play a leadership role. And that really needs to start right here in Washington with the Congress passing legislation that not only addresses this issue in a serious way, but that the rest of the world finds to be rather surprising and stunning, because the United States needs to make up for years of failure in leadership, not just on this issue, but on other issues, and to bring the world along with us. And one of the ways to acquire that kind of legitimacy and that leadership role again is to take action on our own, that we think is right, and that provides a platform for us to work with the rest of the world to take yet more action in the future.

Monica Trauzzi: Something we've heard about recently is the link between national security and climate change and this is something you've written about before. Why is it wrong to make that link?

Scott Barrett: Well, you know, when I say it's wrong it's not as if there is no link. There is a link, but it's a complicated and somewhat tenuous link. The reason I think it's mistaken to emphasize that link -- well, let's say back up, the reason the link is being emphasized, in my opinion, is marketing. That today, in the United States, for an issue to get attention it seems to have to have a security dimension. Well, there are some things we should do simply because they're the right thing to do. They are the right thing to do because of the United States' position in the world. They're the right thing to do because of the interests of the United States alone, quite apart from a security dimension. But the reason that focusing on the security dimension is also troublesome is that it then begs the question, well, what kind of policies would be best to address security? Well, those policies might have to do with modifying the military to address threats resulting from climate change rather than addressing the problem itself. So I think we face many different security threats. And climate, I'd say, is not the most important one, but climate is the most important problem for the world as a whole to deal with together, number one. And number two is the particularly great challenge for developing countries. And the United States has to acknowledge that the U.S. has been the world's biggest emitter. We've provided leadership in a lot of areas, including R&D. We've benefited the rest of the world in many different dimensions, but on this particular issue we've created a problem that the poorest countries in the world will have the hardest time in addressing. If we simply turn our back and say this is not our problem that will create real problems for the United States' legitimacy and its position in the world. And I wouldn't want to say that there would be security ramifications from that, but quite obviously if the U.S. doesn't step up to the plate on this issue we are going to be open to tremendous criticism. So, I'd say for more positive reasons we should act, rather than for negative reasons, but the negative reasons, they're there, but they're subtle. They're in the background and I don't think they should come to the foreground.

Monica Trauzzi: Okay. We're going to end it right there. Thanks for coming on the show.

Scott Barrett: Thank you very much. Thanks.

Monica Trauzzi: This is OnPoint. I'm Monica Trauzzi. Thanks for watching.

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