The End of Kyoto

The Kyoto Protocol was the product of the third Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC). It committed industrialized states to collectively reduce their greenhouse gas (GHG) emissions by an average of 5.2% below 1990 levels between 2008 and 2012. It took eight years for the protocol to come into force, during which the United States of America, the world’s largest greenhouse gas emitter at the time[1], withdrew from its legally-binding mandate. To date, Japan, Russia and Canada have followed suit, leaving Kyoto with a mandate over only 11% of global GHG emissions. By the end of 2012, the first commitment period of the protocol will expire and most of its signatories are bound to miss their targets. What is more, to date, the parties to the UNFCCC have failed to agree on a comprehensive framework to succeed it.

Image courtesy of Kenichi Nobusue, © 2008, some rights reserved.

This raises the question of why there has been so little commitment to Kyoto. This article will attempt to respond by investigating the nature of global climate as an example of the global commons and by discussing the collective action problems associated with regulation of such commons.

The global commons consist of those areas and resources that fall under no sovereign jurisdiction. Global climate, the global freshwater supply and global fish stocks all fall under this category. As public goods, nobody can be excluded from using or consuming them, which is why the market neglects their quality and availability.

Picturing this scenario, the American biologist Garrett Hardin first elaborated on what he termed the “Tragedy of the Commons”, in his 1968 paper of the same name. In it, he explains why the nature of the global commons makes it so difficult to regulate. The commons, he argues, is analogous to an open pasture on which multiple herdsmen graze their sheep. He assumes that each herdsman acts rationally, meaning that he seeks to maximise his utility. In this case, by adding a sheep to his herd, he increases his personal gain. At the same time, he only sacrifices a fraction of that gain by contributing to the overgrazing of the pasture. There exists what Carlisle Ford Runge of the University of Minnesota has called an “asymmetry between individual benefit and collective harm”. Hence, each rational herdsman concludes that it is in his interest to increase his herd. What is individually rational in this case, however, leads to collective irrationality in the form of overgrazing. In the words of Hardin, “the inherent logic of the commons remorselessly guarantees tragedy”.

This inherent logic is directly applicable to the manner in which the international community has approached the regulation of the global climate. Both the creation and the resolution of the climate crisis depended on incremental contributions of individual actors, contributions that in themselves seemed to make no difference to the problem and its solution. This is the basis of the collective action problem that caused the Kyoto Protocol to fail.

Since the 1972 Stockholm Declaration on the Human Environment, there has been a growing recognition of the fact that trans-boundary environmental issues cannot be solved on a national level. As a consequence, states responded by formalizing international regimes, rules and decision-making procedures to address these problems collectively, including the 1979 Convention on Long-Range Trans-boundary Air Pollution or the 1989 Convention on the Trans-boundary Movement of Hazardous Wastes. The basic assumption behind such regimes was that by cooperating, the absolute gains of all actors would exceed the individual gains that would result from individualized action. However, as seen in the case of Kyoto, this logic did not hold.

The most common explanation for the failure of multinational cooperation stems from what game theorists term the Prisoners’ Dilemma. The Prisoners Dilemma demonstrates that individuals fail to cooperate because they do not trust each other. In exercising restraint, for example by reducing GHG emissions or adding less sheep to an open pasture, an individual actor is faced with the possibility that other actors will continue to exploit the commonly shared resource. Game theory has termed this strategy of defection “free-riding”. Free-riding is the act of benefitting from a public good without contributing to its preservation. It accounts for the paradox highlighted by Hardin that individual rationality often leads to collective irrationality.

Some might argue that free-riding is exactly what happened in the case of Kyoto, when the United States of America unilaterally withdrew from its commitment to the protocol in 2001. Yet what happened was more complicated than that. Kyoto did not fail because the United States defected, it failed because free-riding was an institutionalized component of Kyoto. The United States rightfully argued that Kyoto exempted any developing countries from its mandate, including emerging economies such as China, India and Brazil. In the jargon of international diplomacy, Kyoto termed this the principle of “common but differentiated responsibilities”. In reality, it ought to have been called the principle of “free-riding and no responsibilities”.

It is this principle, which is responsible for the failure of the Kyoto Protocol to fulfil its mandate, for it runs directly counter to the inherent logic of collective action. Collective action requires that no individual actors stand to lose or gain more than others. In the case of the United States, by submitting to the constraints of the protocol, it would have been responsible for 50-80% of all emissions reductions, a disproportionate burden even within the Kyoto regime.

In the end, the Kyoto Protocol was not the result of collective action, but of action where some were involved but most were not. As such, it was bound to fail from the outset. In terms of Hardin’s pasture, picture the European Union and a few others neatly counting their sheep while everyone else plays in the dirt.

[1] China being the world’s largest emitter today, in addition to being exempt from the mandate of the Kyoto Protocol.