1 A good example here is the 1990 Montreal Protocol of the use of Annex A materials above certain levels [See Philippe Sands, Principles of International Environmental Law, 261- 262 (Manchester University Press, 1995)1 and the proposed restrictions of the production of greenhouse gases in the Climate Change negotiations [See id. 276-279].
2 This type of unified perspective for the areas of Torts and Property law was the motive for Calabresi and Melamed's article: "Only Rarely are Property and Torts approached from a unified perspective." Guido Calabresi & A. Douglas Melamed, Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, 85 Harv. L. Rev. 1089, 1089 (1972).
3 R.H. Coase, The Problem of Social Cost, 3 J. Law & Econ. I, 15 (1960). 4 Mark Kuperberg & Charles Beitz, Law, Economics, and Philosophy: A Critical In- troduction, with Applications to the Law of Torts 6 (Rowman & Allanheld Publishers 1983). 5 Richard A. Posner, Economic Analysis of Law 30 (Little, Brown and Co., 1972). 6 Kuperberg, supra note 4, at 5. 7 Peter S. Menell & Richard B. Stewart, Environmental Law and Policy Õ 2, at 57 (1994). 8 Coase, supra note 3, at 13. 9Id. at 20. 10 Kuperberg, supra note 4, at 6.
11 Adam Chase, Comment, Barriers to International Agreements for the Adaptation and Mitigation of Global Climate Change: A Law and Economics Approach, I Touro Envtl. L.J. 17, 23 (1994). Of course, there is no common definition of transaction costs. Many critics denounce an overly broad definition of transaction costs because it makes the Coase Theorem a tautology. See C.G. Veljanovski, The Coase Theorem -The Say's Law of Welfare Economics, 53 Econ. Record 535 (1971). 12 Guide Calabresi & Jon Hirschoff, Toward a Testfor Strict Liability in Torts, in Kuperberg, supra note 5, 154 at 157. 13 Richard A. Posner, Economic Analysis of Law 12 (Little, Brown & Company, 1972). 14 Id. at 10.
15 Richard A. Posner, Utilitarianism, Economics and Legal Theory, 8 J. Legal Stud. 103 (1979). 16 See Ronald Dworkin, Why Efficiency? 8 Hofstra Law Review 563, 572 (1980). 17 Fred R. Shapiro, The Most-Cited Law Review Articles Revisited, 71 Chi-Kent L. Rev. 751, 766 (1996). 18 Calabresi, supra note 2. 19 Id. at 1090. 20 Calabresi, supra note 2, 1089 at 1093.
21 See Richard Markovits, A Constructive Critique of the Traditional Definition of the Use of the Concept of "The Effect of a Choice on Allocative (Economic) Efficiency": Why the Kaldor- Hicks Test, The Coase Theorem, and Virtually All Law-and-Economics Welfare Arguments are Wrong, 1993 U. Ill. L. Rev. 485. See Also, Dworkin, supra note 17, at 563; Jules Coleman, The Economic Analysis of Law in Kuperberg, supra note 4, at 102. 22 Pareto Superior allocations of entitlements if perfected would lead to a Pareto Optimal distribution of resources, no further choice of legal entitlement could be made that would leave no party worse off. Coleman, Id. at 102. 23 Id. at 103. 24 Dworkin, supra note 16, at 563. 25 Calabresi, supra note 2, at 1100. 26Id. at 1101.
27 Id. at 1104. 28 Id. at 1105. 29 Id. 30 See Frank 1. Michelman, Pollution as a Tort: A Non-Accidental Perspective on Ca- labresi's Costs, 80 Yale L.J. 647 (1971); Robert C. Ellickson, Alternatives to Zoning: Covenants, Nuisance Rules, and Fines as Land Use Controls, 40 U. Chi. L. Rev. 681 (1973); A. Mitchell Polinsky, Controlling Externalities and Protecting Entitlements: Property Right, Liability Rule, and Tax-Subsidy Approaches, 8 J. Leg. Stud. 1 (1979); A. Mitchell Polinsky, Resolving Nuisance Disputes: The Simple Economics of Injunctive and Damage Remedies, 32 Stan. L. Rev. 1075 (1980); Darryl Bigar, A Model of Punitive Damages in Tort, 15 Int'l Rev. L. & Econ. 1 (1995); James E. Krier & Stewart J. Schwab, Property Rules and Liability Rules: The Cathedral in Another Light, 70 N.Y.U. L. Rev. 440 (1995). 31 Posner, supra note 13, at 10-23. 32Id. at 185. 33 Calabresi, supra note 2, at 1098. 34Id. at 1100. 35 Id. at 1089.
36 Id. at 1090. 37 See Anthony T. Kronman, Specific Performance, 45 U. Chi. L. Rev. 351, 353 (1978). 38 Calabresi, supra note 2, at 1106. 39 See Section on "Strategic Bargaining: Hold-outs and Freeloaders" below. 40 Calabresi, supra note 2, at 1106.
41Id. at 1107. 42 See supra note 30. 43 chard Craswell, Property Rules and Liability Rules in Unconscionability and Related Doctrines, 60 U. Chi. L. Rev. 1, 3 (1993). See also, Kronman, supra note 37, at 382. 44 Craswell, id. at 57. 45 Calabresi, supra note 2, at 1111. 46Id. at 1113. 4� Id. at 1112. 48 Id.
49 Id. at 1113. 50 Susan-Rose Ackerman, Symposium on Law and Economics: Inalienability and the Theory of Property Rights, 85 Colum. L. Rev. 931, 968 (1985). 51 Id. at 969. 52 See Calabresi, supra note 2; See also supra note 30, Louis Kaplow & Steven Shavell, Property Rules v. Liability Rules: An Economic Analysis, 109 Harv. L. Rev. 713 (1996). The term "liability'' used in this context encompasses the meaning of "responsibility" as applied in the framework of State responsibility.
53 See Calabresi, supra note 2, at 1089 (For an application of the same issue at the national level in the United States). 54 Coase, supra note 3, at 15. 55 See Ernst-Ulrich Petersmann, International and European Trade and Environmental Law after the Umguay Round, Annex VIII (Kluwer Law International, 1995) (For examples of regulations embodied in international environmental treaties).
56 Sands, supra note 1, at 163. 57 See id. 58 Jus Cogens is here defined as it was by the International Law Commission in the 1966 ILC Report (pp. 76-77) as quoted in Lauri Hannikainen, Peremptory Norms (Jus Cogens) in International Law: Historical Development, Criteria, Present Status, (Finnish Lawyers' Publishing Co., 1988). 59 Christos L. Rozakis, The Concept of Jus Cogens in the Law of Treaties 12 (North Holland Publishing Company, 1976). 60 In particular, Kronman's application of the distinction of property and liability rules in an analysis of the law of contracts shows that, although the categories may blur, Calabresi's fundamental insight remains valid. Kronman, supra note 37, at 351. 61 See Michelman, supra note 30, at 650.
62 Richard L. Revesz, The C mtrol of Interstate Environmental Externalities in a Federal System, 38 Ariz. L. Rev. 883 (1996). 63 Calabresi, supra note 2, at 1089. 64 See Menell, supra note 7, at 56.
65 Chase, supra note 11, at 17. 66 Carl Dahlman, The Problem of Externality, 22 J.L. & Ec('.1. 141, 148 (1979). 67 Chase, supra note 11, at 23. 68 Id. 69 A. Mitchell Polinsky, Resolving Nuisance Remedies: The Simple Economics of Injunctive and Damage Remedies, 32 Stan. L. Rev. 1075, 1092 (1980).
�� A. Mitchell Polinsky, An Introduction to Law and Economics 18 (Little, Brown and Company, 1983). �1 In the English common law system, this is called the "coming to the nuisance" defense, and was used successfully in the Spur Industries case that paralleled Calabresi and Melamed's work in the Cathedral article. See Spur Indus., Inc. v. Del E. Webb Dev. Co., 494 P.2d 700 (Ariz. 1972) (Cameron, Vice C.J.). 72 This scenario was the fact pattern of Spur Industries, except that the oil refinery was a cattle slaughterhouse. See id. �3 See, James E. Krier & Stewart J. Schwab, Essay: Property Rules and Liability Rules: The Cathedral in Another Light, 70 N.Y.U.L. Rev. 440, 445 (1995). 74 See Calabresi, supra note 2, at 1107.
75 Coase, supra note 3. 76 Louis Kaplow & Steven Shavell, Property Rules versus Liability Rules: An Economic Analysis, 109 Harv. L. Rev. 713, 726 (1996). 77 See Richard B. Stewart, Environmental Regulation and International Competitiveness, 102 Yale L. J. 2039, 2052 (1993); See also, Richard B. Stewart, Models for Environmental Regulation: Central Planning Uersus Market-based Approaches, 19 B.C. Envtl. Aff. L. Rev. 547, 551, (1992). 78 Kaplow, supra note 76, at 726.
�9 Sands, supra note 1, at 163. 80 See Calabresi, supra note 2, at 1105. 81 I analogize from studies promoting administrations with workers who have a greater incentive to see a low-cost execution of a plan, reflecting a common theme in the movement to reform the U.N.. The common analogy compares private sector and public sector employees. See Daniel J. Dudek, Richard B. Stewart & Jonathan B. Wiener, Environmental Policy for Eastern Europe: Teclinology-based versus Market-based Approaches, 17 Colum. J. Envtl. L. 1, 13 (1992) (Authors comment that "a large, centralized government bureaucracy" is inefficient
because central regulators have "less incentive to achieve goals at low cost," which '`means delay, limited foresight, and diminished creativity."). 82 See Polinsky, supra note 69, at 1092. 83 Russell H. Shearer, International Environmental Law and Development in Developing Nations: Agenda Setting, Articulation, and Institutional Participation, 7 Tul. Envtl. L.J. 391, 409(1994). 84 See Michla Pomerance, The United States and the World Court as a 'Supreme Court' of the Nations: Dreams, Illusion, and Disillusion 402 (Martinus Nijhoff Publishers, 1996) (Pomerance cites Judge Schwebel's dissenting opinions in the Nicaragua case to support the argument that the role of the International Court in that case had shifted from an 'international- law application' role to an ominous, majoritarian 'U.N.-organ role').
85 See supra note 81. 86 Coase, supra note 3, at 15. 87 Kaplow, supra note 76, at 731. 88 See Shearer, supra note 83, at 409.
89 Kaplow, supra note 76, at 732. 9� Id. at 724.
91 Id. at 725. 92 Id.. 93 Polinsky, supra note 69, at 1077. 94Id. at 1106. 95 Id. at 1112. 96 Kaplow, supra note 76, at 750. 97 See Dworkin, supra note 16; Coleman, supra note 22, at 102.
98 Kaplow, supra note 76, at 744. 99 See Richard B. Stewart, Environmental Regulation and International Competitiveness, 102 Yale L. J. 2039, 2052 (1993); See also, Richard B. Stewart, Models for Environmental Regulation Central Planning Uersus Market-based Approaches, 19 B.C. Envtl. Aff. L. Rev. 547, 551, (1992).
l00 See supra note 81. 101 Coase, supra note 3, at 15.
102UN Charter art. 13, para. 1. 103 Stephen McCaffrey, An Update on the Contributions of the International Law Commis- sion to International Environmental Law, 15 Envtl. L. 667, 669 (1985). McCaffrey notes that the charter for the International Law Commission was specifically created to avoid the legis- lative function. If the non-legislative function of the ILC is followed, an economic analysis' concern with efficiency of administration over distributive justice is more defensible. Under the charter, the General Assembly would be responsible for creating distributive mechanisms.
104 J. Barboza, Sixth Report, UN Doc. A/CN.4/428, Art. 29(c) (1990).
105 However, this assumes that a polluting nation will not find it in its own interest to in- crease its environmental standards. The experience of developed nations would demonstrate otherwise.
106 Susan Rose-Ackerman, The Economic Analysis of Public Law, I European Journal of Law and Economics, 53 (1994). 107 Guido Calabresi, The Costs of Accidents: A Legal and Economic Analysis 18 (Yale University Press, 1970). 108 See Richard Markovits, A Constructive Critique of the Traditional Definition of the Use of the Concept of "The Effect of a Choice on Allocative (Economic) Efficiency"; Why the Kaldor- Hicks Test, The Coase Theorem, and Virtually All Law-and-Economics Welfare Arguments are Wrong, 1993 U. Ill. L. Rev. 485. See also, Ronald Dworkin, supra note 16; Coleman, supra note 21.