Collective Action Problems and Fish

One of the things I find most interesting about the analytic study of international politics is how the problems of collective decision making interfere with achieving desirable outcomes. All too often, even when actors have a common interest, the enforcement problems inherent in the anarchic nature of the international system prevent them from reaching that common interest (what we would call the "optimal" outcome). Rather, fears of defection and mistrust forces each actor to pursue its own interest, at the expense of the collective, thereby ensuring that each actor is ultimately worse off than if they had cooperated (what we call the "suboptimal" outcome). The most common models of such behaviors are the "prisoners' dilemma" and the "tragedy of the commons." The latter is most relevant in questions of environmental regulation, which almost by definition, involves the attempted regulation of public goods (goods which are available to all and which cannot be denied to someone who refuses to pay for its use, like oxygen).

The problem of the depletion of fishing stocks is a quintessential tragedy of the commons problem. The fish in the ocean are owned by no one, and available for use by all. The collective interest would be to manage the fish stocks so that the fish removed from the ocean are replaced by those remaining reproducing. However, each individual fisherman has a personal incentive to fish as much as possible, and no one can be sure that anyone else will agree to limit their own fishing, much less comply with any such agreement. Thus, international agreements to limit commercial fishing in efforts to preserve fish stocks are exceedingly difficult to reach and even harder to enforce.

The solution to the general problem is either the creation of property rights (whereby each actor now owns a share of the common, and can do whatever he wants to with it, which connects the individual incentive to the collective) or government regulation (forcing the actors to limit their usage). Regulation is difficult, if not impossible, under international anarchy. But what about property rights?

As this article makes clear, property rights are now being seen as a potential solution to the problem of overfishing. In this case:

In a catch share system, individual fishermen, or fishing cooperatives, are allocated a share of the catch based on what they have caught over a prior period, say five or 10 years, explained Christopher Costello of the University of California, Santa Barbara.

For example, if someone averaged 1.5 percent of the catch in a fishery in the past, they would be guaranteed 1.5 percent of the total in the future — regardless of what the total take is.

Thus, a healthy fish stock allowing for a larger total catch means each share is larger, Costello said, so fishermen tend to protect the stock by using less damaging methods.

Using catch shares to manage fisheries is common in some parts of the world and is currently under consideration for some U.S. fisheries also.

Brilliant! Each fisherman now has an incentive to restrain his behavior so as to increase the size of the fishing stock, thereby increasing his future haul and guaranteeing it as well.

Sadly, environmental groups are often opposed to the introduction of market conditions and incentives into environmental issues. One only need consider the oppositon to the creation of pollution markets to see this. However, at least one important environmental NGO is behind this idea:

The finding was welcomed by the Environmental Defense Fund.

"The trend around the world has been to fish the oceans until the fish are gone," said David Festa, vice president and oceans director at EDF. "The scientific data presented today shows we can turn this pattern on its head. Anyone who cares about saving fisheries and fishing jobs will find this study highly motivating."

With any luck, this catch-share system will be broadly implemented, both by national governments regulating their own fishermen and between countries sharing common stocks.

The Absurdity of International Climate Change Policy

Yesterday, the leaders of the G8 countries announced a break-through (of sorts) on international climate change policy. In exchange for getting the United States to agree to the relatively modest goal of reducing carbon emissions by 50% by 2050, the other members signed on to a statement that developing countries -- including China (now the leading producer of carbon emissions), India, Brazil, and Mexico -- need to cut their emissions as well.

But therein lies the rub. The developing countries do not feel that they should be required to cut their emissions, as they did not contribute to the current problem. In a statement, the five major developing countries announced that "It is essential that developed countries take the lead in achieving ambitious and absolute greenhouse gas emissions reductions," and that they rejected the notion that all should share in the 50-percent target, since it is wealthier countries that have created most of the environmental damage up to now.

This might be true in a moral sense. Certainly, the developed economies of the Western countries have produced more carbon that have those of the developing nations. But morality doesn't count for much in politics. If the developing countries refuse to cut their emissions, political theory tells us that the developed states will be hesitant to do so, for fear of losing their edge and seeing their relative power diminish. Ultimately, the environment is a massive tragedy of the commons, in which the absence of over-arching regulatory authority means that a public good gets overused, as no actor will restrain his use of the commons while other actors remain free to exploit it. Why should the US damage its own economy if China remains free to pollute? China will enjoy the gains of a better environment, without paying the costs, while the US will pay the costs without reaping the full benefits, due to China's continued polluting.

The international arena is not the best venue for producing global environmental change. The collective actions problems, as well as other barriers to action, are simply too large. As states like California have recently developed, the best strategy is to focus on local change, and to allow other mechanisms to spread the successful innovations and developments to other parts of the country and the world. The international system is far too anarchic and power-based to expect any real progress.

The Environment Versus the Poor, Part 2

In an anarchic international system in which international law is at best weak and at worst toothless and ignored, questions of duties beyond borders are difficult ones. Do states have obligations, be they legal or moral, to actors outside of their own political control? Many issues of international politics touch on this question, such as promulgation of human rights, but in no case is the problem raised more clearly than in the issue of biofuels. As I blogged about last week, there is strong evidence that the push by developed states to develop biofuels is directly contributing to recent food shortages by artificially encouraging under-production of food crops (not to mention that fact that biofuels may be worse for the environment than the fuels they replace). This has led to a call from many leading food scientists to cease producing food-based biofuels, an action which they claim could reduce the price of corn by 20% and wheat prices by 10%. So, if the actions of the developed states are causing food shortages in the developing world, does the developed world have any obligation to change its policies?

Not according to President Bush. In a recent press conference, the president called for the US to increase the use of ethanol (the leading biofuel) to reduce rising fuel prices and to reduce American energy dependence. According to Bush, "it's in our national interest that our farmers grow energy, as opposed to us purchasing energy from parts of the world that are unstable or may not like us."

While other states are moving away from the production of biofuels, the US is by far the largest global producer, so unless the US does so as well, there is likely to be little impact on prices (not to mention that collective action problems will dissuade others from stopping production if the US won't). The impact of biofuel production on food prices is disputed: President Bush asserted that 15% of the recent rise is due to biofuels, while the US Department of Agriculture put the number at 20%. Furthermore, "a soon to be released International Food Policy Research Institute analysis blames 30 percent of the overall food price rise from 2000-2007 on biofuels, while a [biofuel] industry-funded study put the food cost rise at 4 percent."

This is an excellent illustration of many of the problems that make international relations so fascinating and so frustrating. Today's globalized and interdependent world has certainly changed the contours of the notion of obligation -- even if one doesn't believe in moral or legal obligations, the notion of economic and political interdependence connects obligation to national interest in a powerful way. States that ignore the needs of others in one issue area can be made to pay a high price in a different issue area. For example, the west's inability to lift domestic agricultural subsidies gave the developing world the leverage to refuse to agree to new market openings at the recent Doha round of WTO negotiations. Simply being wealthier and more powerful isn't enough to get one's way in a globalized world.

Additionally, policy imperatives compete, and often conflict, with one another. Leaving aside the likely irony that biofuels are worse for the environment than fossil fuels, how do states decide between competing obligations? Do we save the environment if doing so means condemning people to starvation or depriving the developing world with the means to develop? Needless to say, answering these questions is a unenviable task.

In this case, the US needs to end incentives for biofuel production immediately. It's one thing to make a hard choice to pursue one agenda at the expense of another; it's another thing entirely when pursuing one agenda is entirely counterproductive. Given the evidence that biofuels are worse for the environment, it seems like that the US program to encourage their production is more a sneaky way to protect the US agricultural market than a genuine effort to save the planet. And given the impact that this protection is having on the global food market, that choice isn't just bad politics, it's just plain bad.

The Environment Versus the Poor

In the wake of Earth Day, and in the run-up to the conference on energy dependence and aviation this Friday here at UPS, is the need to confront the stark truth that goods in the world are scarce and that attending to one concern often produces unintended consequences. Case in point: the mounting evidence that the production of biofuels is greatly contributing to rising food prices, food shortages, and even widening hunger and starvation in the developing world. According to the New York Times:

The food crisis is not only being felt among the poor but is also eroding the gains of the working and middle classes, sowing volatile levels of discontent and putting new pressures on fragile governments.

In Cairo, the military is being put to work baking bread as rising food prices threaten to become the spark that ignites wider anger at a repressive government. In Burkina Faso and other parts of sub-Saharan Africa, food riots are breaking out as never before. In reasonably prosperous Malaysia, the ruling coalition was nearly ousted by voters who cited food and fuel price increases as their main concerns.

“It’s the worst crisis of its kind in more than 30 years,” said Jeffrey D. Sachs, the economist and special adviser to the United Nations secretary general, Ban Ki-moon. “It’s a big deal and it’s obviously threatening a lot of governments. There are a number of governments on the ropes, and I think there’s more political fallout to come.”

Indeed, as it roils developing nations, the spike in commodity prices — the biggest since the Nixon administration — has pitted the globe’s poorer south against the relatively wealthy north, adding to demands for reform of rich nations’ farm and environmental policies. But experts say there are few quick fixes to a crisis tied to so many factors, from strong demand for food from emerging economies like China’s to rising oil prices to the diversion of food resources to make biofuels.

It's the last that is of particular concern as governments are encouraging and subsidizing the production of biofuels as a means of reducing emissions responsible for global warming. The problem is that government involvement is distorting the market, as subsidies for biofuels artificially change the market incentives to convert farm crops into biofuels and to replant cropland to produce grains for biofuel production. These decisions then raise the global price of food staples that, particularly in the developing world, contribute to food shortages, riots, and starvation. According to the International Food Policy Research Institute:

biofuel production accounts for a quarter to a third of the recent increase in global commodity prices. The Food and Agriculture Organization of the United Nations predicted late last year that biofuel production, assuming that current mandates continue, would increase food costs by 10 to 15 percent.

Of course, there are other factors contributing to the rising cost of food. Escalating oil prices raise the price of transport, burgeoning populations and improving economic conditionks have increased demand, and droughts and other disasters have destroyed production. But costs accruing from biofuel production are entirely within the ability of the developed world to control. Furthermore, there is little evidence that biofuels do, in fact, contribute positively to the regulation of global warming. According to a New York Times article from February 8, 2008, biolfuels may be more harmful to the environment that the fuels they replace.

Almost all biofuels used today cause more greenhouse gas emissions than conventional fuels if the full emissions costs of producing these ''green'' fuels are taken into account, two studies published Thursday have concluded.

The benefits of biofuels have come under increasing attack in recent months, as scientists took a closer look at the global environmental cost of their production. These latest studies, published only by the journal Science, are likely to add to the controversy. These studies for the first time take a detailed, comprehensive look at the emissions effects of the huge amount of natural land that is being converted to cropland globally to support biofuel development.

The destruction of natural ecosystems -- whether rain forests in the tropics or grasslands in South America -- not only releases greenhouse gases into the atmosphere when they are burned and plowed, but also deprives the planet of natural sponges to absorb carbon emissions. Cropland also absorbs far less carbon than the rain forests or even scrubland that it replaces.

Together the two studies offer sweeping conclusions: It does not matter if it is rain forest or scrubland that is cleared, the greenhouse gas contribution is significant. More important, they discovered that, globally, the production of almost all biofuels resulted, directly or indirectly, intentionally or not, in new land's being cleared for food or fuel.

''When you take this into account, most of the biofuel that people are using or planning to use would probably increase greenhouse gases substantially,'' said Timothy Searchinger, lead author of one of the studies and a researcher in environment and economics at Princeton.

So, if biofuels are actually harmful to the environment and contribute to hunger and starvation in the developing world, why would governments encourage their production? Because biofuels subsidies are politically popular. As pressure increases on the governments of the US, Europe, and Japan to lift the agricultural subsidies that undermine development, biofuels have emerged as a way to protect the politically important farm constituency without appearing to do so. But a market distortion is a market distortion. Even discounting the non-beneficial nature of biofuels, clearly if their production was left to the market, farmers would be producing food instead. That is reason enough for the governments of the developed world to stop subsidization and incentive programs.

Next Stop, Garbage Island!

Apparently, garbage island, the destination of the barge on which Homer Simpson lands while escaping from a proselytizing Ned Flanders, is real. The Independent has a report about a "plastic soup" of garbage in the Pacific that is twice the size of the continental United States. According to the report:

The vast expanse of debris – in effect the world's largest rubbish dump – is held in place by swirling underwater currents. This drifting "soup" stretches from about 500 nautical miles off the Californian coast, across the northern Pacific, past Hawaii and almost as far as Japan.

...

The "soup" is actually two linked areas, either side of the islands of Hawaii, known as the Western and Eastern Pacific Garbage Patches. About one-fifth of the junk – which includes everything from footballs and kayaks to Lego blocks and carrier bags – is thrown off ships or oil platforms. The rest comes from land.

...

Curtis Ebbesmeyer, an oceanographer and leading authority on flotsam, has tracked the build-up of plastics in the seas for more than 15 years and compares the trash vortex to a living entity: "It moves around like a big animal without a leash." When that animal comes close to land, as it does at the Hawaiian archipelago, the results are dramatic. "The garbage patch barfs, and you get a beach covered with this confetti of plastic," he added.

The majority of the "soup" appears to be plastic. Recently, there has been increasing movement in cities, localities, and even countries to move away from the use of plastics, particularly in grocery bags. One can only anticipate that the existence of 100 million tons of floating garbage covering thousands of miles of ocean will increase international pressure to reduce the amount of plastics waste produced. I would fully expect that the UN, or some other international environmental entity, will take this issue up in the near future.

Swapping Debt For Nature

The US has agreed to forgive approximately $26 million of debt from Costa Rica. The catch? Costa Rica has to use the money that would have gone to service the debt for environmental protection. Specifically, Costa Rica will "invest a similar amount in conserving high-risk natural areas that are the home to such threatened species as jaguars, squirrel monkeys and scarlet macaws. The funds will help protect important Costa Rican natural areas including the Osa Peninsula, Tortuguero, La Amistad, Maquenque, Rincón de la Vieja and the Nicoya Peninsula, officials said."

Debt-for-nature swaps are an exciting and innovative way to kill two birds with one stone: On the one hand, developing states can get out from under the crushing debt burden that stifle their domestic economies and strip valuable assets from the nation. On the other, it encourages developing nations to take a greater interest in protecting, rather than exploiting, endangered resources. Surprisingly, the Costa Rican deal is the 13th deal forged by the US (not to mention debt-for-nature swaps engineered by other counties, like one between France and Cameroon). Similar deals have protected endangered rain forests in Peru and tropical forests in Guatemala.

What's so surprising is that such deals have gotten so little publicity. I first heard of these deals only about a year ago, when it was reported that the US was negotiating the details of the Costa Rican agreement. But this seems to be case of win-win: the US can aid development in poorer parts of the world at the same time as it encourages responsible and sustainable environmental practices and conservation. So why is there so little attention being paid to these deals? It seems to me that, especially given current global antipathy towards American environmental positions and practices that the Costa Rican deal would be trumpeted from every available mountaintop in the US government.

Any suggestions as to why these policies are flying under the radar will be much appreciated (and if there are any graduate students reading this, this could make an excellent dissertation puzzle).