One of the concerns in the economics literature on environmental agreements (including the UNFCCC and Kyoto Protocol) has been with increasing participation. The most obvious way in which international agreements seek to increase participation is by means of a minimum participation clause. This is an article that specifies the agreement will not be binding on any of its Parties until a large enough number of countriesand, sometimes, particular countries or types of countrieshave ratified the agreement. The minimum participation clause effectively makes the obligations of each of its signatories a (non-linear) function of the total number of signatories.
The minimum participation clause can serve as a strategic device, but this need not always be the case. Suppose that the minimum participation level is given as k+. Then, if the actual number of signatories is k, and k < k+ 1, accession by a non-signatory neither costs this country anything nor confers upon it any advantage. This is because the agreement would not yet be binding on this country. However, if k = k+ 1, then accession has a non-marginal effect on the environmental problem, for the accession will mean that all of the k+ countries must undertake the measures prescribed by the treaty. One way to sustain full co-operation would be to set k+ equal to the total number of countries affected by an environmental problem (i.e., all countries), while ensuring that every potentially participating country is better off with the agreement than without it. Obviously, the threat not to undertake any abatement for a smaller value of k can be an important incentive for countries that consider joining the agreement to actually do so (because they believe that free-riding doesnt pay). It is therefore extremely important that this threat be credible. However, in the vast majority of cases it will not be (Hoel, 1993; Carraro and Siniscalco, 1993; Barrett, 1994).
More importantly, the actual number of Parties to an agreement usually exceeds the minimum participation level, which is another reason why the above threat mechanism cannot be used to deter free-riding. The minimum participation level clause may rather serve as a co-ordinating device than as an actual incentive to join the agreement.
The point, however, is that while agreements must offer some alternative means for deterring free-riding, often they do not. The literature on international environmental agreements therefore predicts that participation will be incomplete, and it often is. One of the few agreements that disproves this general rule is the 1987 Montreal Protocol on Substances that deplete the ozone layer (UNEP, 1987; revised and amended in 1990 and 1992). The revised Protocol contains provisions that control trade between Parties and non-Parties to the regime. Coupled with the financial resources available to developing countries Parties that are not available to non-Parties, the Partynon-Party trade provisions are widely cited as a major factor in explaining the near universal participation in the ozone regime (Rowlands, 1995). See also Chapter 10 for a further discussion on participation in international regimes.
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