Lessons Learned on the Rational Design of International Environmental Agreeements

Last month, the UNEP Governing Council voted to begin negotiation of a treaty on mercury pollution.  The negotiations will start next year and are supposed to conclude in 2013.  Meanwhile, negotiations on the future of the international climate change regime will resume next week in Bonn, aimed at reaching an agreement at the Copenhagen Conference in December.

The development of any new environmental regime involves a huge number of design choices, including:

• Negotiating forum (global or regional, general or specialized)
• Substantive scope
• Legal form (new treaty, modification of existing treaty, decision or resolution)
• Commitments (including their depth, precision, regulatory approach and regulatory target)
• Incentives for participation (carrots and sticks)
• Mechanisms to promote flexibility
• Institutional arrangements (functions, decisionmaking rules etc)
• Implementation and compliance mechanisms (to generate information, provide assistance, and respond to non-compliance)
• Exit clauses (reservations, withdrawals)

In the case of the mercury and climate change negotiations, some of these design issues are already decided (forum, membership and, for the mercury negotiations, legal form and scope). But many are still open.

How should the negotiators of the mercury and climate change regimes proceed in designing new agreements?  One possible source of ideas is the growing literature on the “rational design of international institutions.”  Over the past decade, something of a cottage industry has developed around this topic.  I’m thinking here not only of the special issue of International Organization edited by Barbara Koremenos, Charles Lipson, Duncan Snidal, but also a wide variety of other work by international lawyers such as Kal Raustiala and Larry Helfer, political scientists such as Ron Mitchell, and economists such as Scott Barrett.  (Since Andrew Guzman is both a lawyer and an economist, I’m not sure where to put him!)

Much of the literature on rational design has had an explanatory focus. Writers have attempted to account for various features of international agreements in terms of their functional benefits for states.  The assumption is that states are rational actors and make design choices to serve their interest, say, in flexibility or credibility or speed.  The explanatory power of the rational design literature is subject to debate.  On the one hand, government officials sometimes act rationally, so one would expect them to design treaties based on functional considerations. But since functional considerations often point in different directions, they do not produce determinate results.  Moreover, as Kal Raustiala persuasively argued in his AJIL piece, “Form and Substance in International Agreements,” many other factors also influence negotiations – including, in particular, domestic politics.  So functional explanations are, at best, incomplete.

But my concern here is with a different use of the rational design literature: not its value ex post in explaining existing agreements, but its value ex ante in designing new ones.  To a significant degree, international environmental negotiators already have considerable practical expertise in design issues.  Over the past several decades, they have developed a rich toolkit of design elements affecting the depth, strength and flexibility of agreements. (Some of these were surveyed by Peter Sand nearly two decades in Lessons Learned in Global Environmental Governance.)  What might treaty negotiators learn from the rational design literature about how to design a successful agreement?  What are the most important lessons?

To my mind, there are relatively few take-away lessons.  The rational design literature does not provide a recipe for success.  Design choices will continue to require the practical judgment of experienced treaty negotiators.  But the rational design literature can provide a valuable complement by analyzing more rigorously the choices and tradeoffs involved when designing a regime.  One important lesson, perhaps not fully appreciated by treaty negotiators, is the degree to which design elements are interconnected.  The effectiveness of an agreement is a function not only of the depth of its commitments, but also the degree to which states participate and comply — factors that are in turn a function of an agreement’s provisions on implementation and compliance, its exit clauses, and so forth and so on.  That is why we need to see the design of an institution in holistic terms.  It is also why some conventional truths, which focus on particular design elements, may not be true, such as that legal agreements are always superior to non-legal ones, or that strong compliance systems are always superior to weaker ones.

In short, the rational design literature does not provide an instruction manual for treaty negotiators … but it can help inform their choices.