Carrots without Sticks? New Financial Mechanisms for Global Environmental Agreements*

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Carrots without Sticks? New Financial Mechanisms for Global Environmental Agreements*

in Max Planck Yearbook of United Nations Law Online


* Revised version of the 1999 Brodies Lecture on Environmental Law deliv- ered at the Faculty of Law, University of Edinburgh (5 February 1999). 1 L. Condorelli, Preface to L. Boisson de Chazournes et al. (eds), Protection Internationale de l'Environnement, 1997, 7 ("laboratoire de pointe"); and P.M. Dupuy, "Ou en est le droit international de 1'environnement a la fin du si�cle?", RGDIP 101 (1997), 873 et seq., (900). 2 See P.H. Sand, "International Economic Instruments for Sustainable De- velopment : Sticks, Carrots and Games", IJIL 362 (1996), 1 et seq.; Id., "Sticks, Carrots, and Games", in: M. Bothe and PH. Sand (eds), Environ- mental Policy,: From Regulation to Economic Instruments, Hague Academy of International Law, forthcoming 1999; and P. Mickwitz, Positive Meas- ures: Panacea or Placebo in International Environmental Agreements, Nordic Council of Ministers 1998.

3 E.g., see the "Guidelines on Environment and Aid" adopted since 1991 by the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development; especially No.4, Guideline for Aid Agencies on Global Environmental Problems, OECD 1992. All World Bank projects are subject not only to a series of specific policies and proce- dures for prior environmental assessment introduced since 1989, but also to an evaluation of their potential "global externalities'' (including emissions of greenhouse gases or ozone-depleting substances, pollution of interna- tional waterways, and impacts on biodiversity) pursuant to Operational Policy OP 10.04 on Economic Evaluation of Investment Operations (Sep- tember 1994), para. 8 and fn. 5; see C.E. Di Leva, "International Environ- mental Law and Development", Geo.lnt'l EnvtLL.Rev. 10 (1998), 501 et seq., (531). 4 Total official development assistance from OECD countries (about 30% of which is disbursed through multilateral institutions, while the remainder is bilateral aid) was US$ 49.8 billion in 1997, down from US$ 55.4 billion in 1996; Development Co-operation: 1997 Report, OECD 1998, updated fig- ures in: 5 World Bank lending for environmental projects, which had steadily in- creased since 1986, for the first time shows a decline in Fiscal Year 1998 (US$ 10.9 billion, down from US$ 11.6 billion in 1997); World Bank, An- nual Report 1998, Figures 2 and 3-2 pb/annrep98.

6 Budget data in Yearbook of International Co-operation on Environment and Development (1998-1999), 224 and 253 net ; for a comparative assessment see W E. Franz, "The Scope of Global Environmental Financing: Cases in Context", in: R.O. Keohane and Marc A. Levy (eds), Institutions for Environmental Aid: Pitfalls and Promise, 1996, 367 et seq. 7 US$ 600 billion annually, including US$ 125 billion on grant or conces- sional terms from the international community; para. 33.18 of the Report of the United Nations Conference on Environment and Development, Doc. A/CONF 151/26/Rev (Vol. I), 417. 8 According to the 1997 OECD/DAC data (see note 4), official development assistance (ODA) from OECD countries represents about 0.22% of GNP on average — i.e., the lowest average in over 30 years, and way below the 0.7 target, which only the Scandinavian countries and the Netherlands have met. See also the 1997 Report of the UN Secretary General to the Commis- sion on Sustainable Development, "Overall Progress Achieved since the United Nations Conference on Environment and Development", Doc. E/CN.17/1997/2, para. 99, "Financial Resources and Mechanisms", Doc. E/CN.17/1997/2/Add.23, paras. 33-36 dsd.htm; and J.G. Speth, "A New Global Environmental Framework", Environmental Forum 15 (1998), 44 et seq., (46).

9 On national security concerns underlying this concept, see P.H. Sand, "In- ternational Law on the Agenda of the United Nations Conference on Envi- ronment and Development: Towards Global Environmental Security?", Nord.J.lnt'lL 60 (1991), 5 et seq., (9); and generally A.S. Timoshenko, "Ecological Security: Response to Global Challenges", in: E.B. Weiss (ed.), Environmental Change and International Law: New Challenges and Di- mensions, 1992, 413 et seq. 10 On the solid economic interests behind the common heritage concept as originally applied to genetic resources, see G.S. Nijar and C.Y Ling, "The Implications of the Intellectual Property Rights Regime of the Convention on Biological Diversity and GATT on Biodiversity Conservation: A Third World Perspective", in: A.F. Krattiger et al. (eds), Widening Perspectives on Biodiversity, 1994, 277 et seq., (279); V.M. Marroquin-Merino, "Wildlife Utilization: A New International Mechanism for the Prospection of Bio- logical Diversity", Law and Policy in International Business 26 (1995), 303 et seq., (310); G. Rose, "International Regimes for the Conservation and Control of Plant Genetic Resources", in: M. Bowman and C. Redgwell (eds), International Law and the Conservation of Biological Diversity, 1996, 145 et seq., (1�54). See generally B.M. Russett and J.D. Sullivan, "Col- lective Goods and International Organization", International Organization 25 (1971), 845 et seq. 11 The term goes back to T.S. Kuhn, The Structure of Scientific Revolutions, 2nd edition 1970. See generally M. Jori, "Paradigms of Legal Science", Rivista Internazionale di Filosofia del Diritto 67 (1990), 230 et seq. 12 R. Dolzer, "Die internationale Konvention zum Schutz des Klimas und das allgemeine V61kerrecht", in: U. Beyerlin et aL (eds), Recht zwischen Um- bruch und Bewahrung, 1995, 957 et seq., (972); U. Beyerlin, "State Com- munity Interests and Institution-Building in International Environmental Law", ZaoRV 56 (1996), 601 et seq., (605); E. Komicker, lus Cogens und Umweltvolkerrecht, 1997, 157. See generally B. Simma, "From Bilateralism to Community Interest in International Law", RdC 250 (1994), 217 et seq. 13 B. Connolly, "Increments for the Earth: The Politics of Environmental Aid", in: Keohane and Levy (eds), see note 6, 327 et seq., (330).

14 The greening of international development assistance itself went through a long and acrimonious debate with the recipients over the "additionality" and "green conditionality" of the resources generated for this purpose; see S. Macleod, Financing Environmental Measures in Developing Countries. The Principle of Additionality, IUCN Environmental Policy and Law Pa- per No. 6, 1974. 15 UNTS Vol. 1037 No. 15511. 16 See R.N. Gardner (ed.), Blueprint for Peace, 1966, 154 et seq.; and R.L. Meyer, "Travaux Preparatoires for the UNESCO World Heritage Conven- tion", Earth Law Journal 2 (1976), 45 et seq. 17 Budget data in Yearbook of International Co-operation on Environment and Development (1998-1999), 148; see also D. Navid, "Compliance As- sistance in International Environmental Law: Capacity-Building, Transfer of Finance and Technology", ZaoRV 56 (1996), 810 et seq. 18 PH. Sand, "Trusts for the Earth: New International Financial Mechanisms for Sustainable Development", in: W. Lang (ed.), Sustainable Development and International Law, 1995, 167 et seq., (171).

19 UNTS Vol. 1522 No. 26369 and Vol. 1684 No. 26369, ILM 26 (1987), 1541 et seq., and 30 (1991), 537 et seq. See generally R.E. Benedick, Ozone Di- plomacy: New Directions in Safeguarding the Planet, revised edition 1998; E.A. Parsons, "Protecting the Ozone Layer", in: P.M. Haas, R.O. Keohane and M.A. Levy (eds), Institutions for the Earth: Sources of Effective Inter- national Environmental Protection, 1993, 49 et seq. 20 N.C. Scott, "The Montreal Protocol's Environmental Subsidies and Gatt: A Needed Reconciliation", Tex.Int'l L.J. 29 (1994), 211 et seq.; M. Bothe, "The Evaluation of Enforcement Mechanisms in International Environ- mental Law", in: R. Wolfrum (ed.), Enforcing Environmental Standards: Economic Mechanisms as Viable Means?, 1996, 13 et seq., (34), and J.B. Wiener, "Global Environmental Regulation: Instrument Choice in Legal Context", Yale L.J. 108 (1997), 677 et seq., (708). 21 Note the preamble (para. 7) as amended in 1990: "The funds (to be pro- vided by the MPMF) can be expected to make a substantial difference in the world's ability to address the scientifically established problem of ozone depletion and its harmful effects..." For a recent quantification see J. Armstrong, "Global Benefits and Costs of the Montreal Protocol", in: P.G. Le Prestre, J.D. Reid and E.T. Morehouse Jr. (eds), Protecting the Ozone Layer: Lessons, Models, and Prospects, 1998, 173 et seq. 22 Budget data in Yearbook of International Co-operation on Environment and Development (1998-1999), 79. See J.M. Patlis, "The Multilateral Fund of the Montreal Protocol: A Prototype for Financial Mechanisms Protect- ing the Global Environment", Cornell Int'l L.J. 25 (1992), 181 et seq.; A. Wood, "The Multilateral Fund for the Implementation of the Montreal Protocol", International Environmental Affairs 5 (1993), 335 et seq.; T. Gehring, Dynamic International Regimes: Institutions for International Environmental Governance, 1994, 287 et seq.; E.R. De Sombre and J. Kauffman, "The Montreal Protocol Multilateral Fund: Partial Success Story", in: Keohane and Levy , see note 6, 89 et seq.

z3 In 1992, the Conference of the Parties to the Montreal Protocol adopted an "indicative list of categories of incremental costs", ILM 32 (1993), 874 et seq. On the difficulty of extrapolating the concept to other global agree- ments, see A. Jordan and J. Werksman, "Financing Global Environmental Protection", in: J. Cameron, J. Werksman and P. Roderick (eds), Improving Complianre with International Environmental Law, 1996, 214 et seq. P. Manzini, costi ambientali nel diritto internazionale, 1996. 24 Article 4 para.3 of the UN Framework Convention on Climate Change, and article 20 para.2 of the Convention on Biological Diversity, UNTS Vol. 1760 No. 30619 and Vol. 1771 No. 30822; ILM 31 (1992), 822 and 849. z5 See note 7, para. 33.14 lit. a (iii). 26 Article 2, ILM 33 (1994), 1283; see note 34. 27 and home.htm. On the question of the Fund's legal status, see note 83. z8 Pursuant to a bilateral "Ozone Projects Agreement" with the MPMF Ex- ecutive Committee, the World Bank established a separate "Ozone Projects Trust Fund" for that purpose; IBRD Resolution 91-5, Annex D and Sup- plement, ILM 30 (1991), 1770. 29 IBRD Resolution 91-5, supplemented in October 1991 by tripartite proce- dural arrangements with UNDP and UNEP; ILM 30 (1991), 1735 et seq. See LF I. Shihata, "The World Bank and the Environment: A Legal Per- spective", Maryland Journal of International Law and Trade 16 (1992), 1 et seq., (31); H. Sjoberg, From Idea to Reality: The Creation of the Global Environment Facility, GEF Working Paper No.10, 1994; S.A. Silard, "The Global Environment Facility: A New Development in International Law and Organization", Geo.Wash.J.Int'IL&Econ. 28 (1995), 607 et seq.; L. Boisson de Chazournes, "Le Fonds pour 1'environnement mondial: recher- che et conquete de son identite", AFDI 41 (1995), 612 et seq. and see also in this Volume; M. Ehrmann, "Die Globale Umweltfazilitat (GEF)", Za6RV 57 (1997), 565 et seq.

30 World Bank, Establishment of the Global Environment Facility, 1991; ILM 30 (1991), 1739. 31 See L. Jorgenson, "The Global Environment Facility: International Waters Coming into its Own", Green Globe Yearbook of International Co- operation on Environment and Development , 1997, 45 et seq. 32 See I.H. Rowlands, "The Fourth Meeting of the Parties to the Montreal Protocol: Report and Reflection", Environment 35 (1993), 25 et seq., (28); and Gehring, see note 22, 306. 33 See notes 67 and 121. 34 Instrument for the Establishment of the Restructured Global Environment Facility (Geneva, 14 March 1994), ILM 33 (1994), 1283 et seq.; see H. Sjo- berg, "The Global Environment Facility", in: J. Werksman (ed.), Greening International Institutions, 1996, 148 et seq.; and generally http://www. 35 Agenda 21, see note 7, para. 33.14 lit. a (iii). 36 On the relationship with the two conventions, see note 80.

37 ILM 33 (1994), 1328 et seq.; see M. Bekhechi, "Une nouvelle etape dans le developpement du droit international de I'environnement: la Convention sur la desertification", RGDIP 101 (1997), 32 et seq. 38 As decided by the first Conference of the Parties, Rome 1997. Operation of the 1FAD-hosted mechanism has not started so far, and the adoption of a Memorandum of Understanding with IFAD - UN Doc. 1CCD/COP(2)/4, Add.l, as submitted to the second conference, Dakar 1998 - was deferred to the third COP, scheduled to be held at Recife/Brazil in November 1999. Meanwhile, the GEF continues to finance projects relating to deserts and land degradation to the extent that they fall within one of its four current focal areas; 1994 Instrument, article 3, see note 34. 39 At the second meeting of the Intergovernmental Negotiating Committee in Nairobi (January 1999); see also the 1998 report to the GEF Council, "Re- lations with Conventions", GEF/C12/12 (1998). 40 Sand, see note 18, 22 et seq.; G.J. Batmanian, "The Pilot Program to Con- serve the Brazilian Rainforests", International Environmental Affairs 6 (1994), 3 et seq.; and World Bank, Rain Forest Pilot Program Update, Vol. 6 (1998). 41 IBRD Resolution 92-2 (24 March 1992) establishing the Rain Forest Trust Fund, Attachment 2 (Background Note), para. 1.

42 As in the case of desertification (see note 38), GEF funding of projects in the field of deforestation is possible within the context of the four focal ar- eas, under article 3 of the 1994 Instrument; see note 34. a3 The 1992 Rio Conference failed to produce the binding global forest con- vention then envisaged; see R. Tarasofsky, The International Forests Re- gime: Legal and Policy Issues, 1995, 2 et seq. 44 International Institute for Sustainable Development (IISD), Linkages Jour- nal4 (1999), 22. a5 See note 24. Uncorrected text of the Protocol in ILM 37 (1998), 22 et seq.; corrected text at the website of the Bonn Secretariat, See generally C. Breidenich, D. Magraw, A. Rowley and J.W Rubin, "The Kyoto Protocol to the United Nations Framework Convention on Climate Change", AJIL 92 (1998), 315 et seq. 46 From the vast and rapidly growing literature, e.g. see O. Kuik, P. Peters and N. Schrijver (eds), Joint Implementation to Curb Climate Change: Le- gal and EconomicAspects, 1994; A.G. Hanafi, "Joint Implementation: Legal and Institutional Issues for an Effective International Program to Combat Climate Change", Haruard Environmental Law Review 22 (1998), 441 et seq.; D.M. Driesen, "Free Lunch or Cheap Fix? The Emissions Trading Idea and the Climate Change Convention", Boston College Environmental Affairs Law Review 26 (1998), 1 et seq.; J. Werksman, "The Clean Devel- opment Mechanism: Unwrapping the 'Kyoto Surprise'", Review of Euro- pean Community and International Environmental Law 7 (1998), 147 et seq.

47 World Bank, Information Document on the Prototype Carbon Fund, Feb- ruary 1999, 5 et seq.; see also World Bank, Environment Matters: Annual Review 1998, 53. For NGO criticism see D. Wysham, "The World Bank: Funding Climate Chaos", Ecologist 29 (1999), 108 et seq. 4a Investors will receive carbon offset certificates (by a designated independ- ent certifying company), as evidence of their efforts to comply with emis- sion reduction targets, although any validation or "crediting" under arts. 6 or 12 of the Kyoto Protocol will be subject to the formal certification pro- cess being developed under the auspices of the Conference of the Parties; Di Leva, see note 3, 508 et seq., and notes 70 and 123. 49 A. Al-Gain, "Agenda 21: The Challenge of Implementation", in: A. Kiss and F. Burhenne-Guilmin (eds), A Law for the Environment: Essays in Honour of Wolfgang E. Burhenne, 1994, 21 et seq., (25) (defining the his- torical imbalance of pollutant emissions as "a debt owed by the industrial nations to the global environment, and by extension, to the nations of the world whose future development [is] now imperiled"). 50 See the rather gloomy appraisal by R. Falk, "Environmental Protection in an Era of Globalization", Yearbook of International Environmental Law 6 (1995), 3 et seq. 51 L. Boisson de Chazournes, "Les m6canismes conventionnels d'assistance economique et financi6re et le fonds pour 1'environnement mondial", in: C. lmp6riali (ed.), L'effectivite du droit international de l'environnement, 1998, 187 et seq., (190).

52 Sand, see note 18, 172 et seq.; and Sand, see note 84, 487 et seq. 53 Special trust fund accounts (administered by the UNEP Environment Fund in Nairobi) for the 1973 Convention on International Trade in En- dangered Species of Wild Fauna and Flora, the 1979 Convention on Con- servation of Migratory Species of Wild Animals, the 1985 Vienna Conven- tion for the Protection of the Ozone Layer, the 1989 Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal, and the trust funds set up for regional marine environment con- ventions in the Mediterranean (1976), the Gulf (1978), the West and East African coasts (1981 and 1985), and the Caribbean (1983). A similar trust fund account (administered by the UN Secretariat in New York) was set up for the 1979 UN/ECE Convention on Long-Range Transboundary Air Pollution (LRTAP), mainly for international administrative costs of the European Monitoring and Evaluation Programme (EMEP) pursuant to a 1984 protocol, UNTS Vol. 1491 No. 25638; ILM 24 (1985), 484 et seq. S4 E.g., UNEP trust funds to finance attendance at Montreal Protocol meet- ings, see note 19; and for bilateral technical assistance under the Basel Con- vention, see note 60. 55 See notes 4-8. 56 UNTS Vol. 996 No. 14583; see M.J. Bowman, "The Ramsar Convention Comes of Age", Neth.lnt'lL Rev. 42 (1995), 1 et seq., 40. 57 Budget data in Yearbook of International Co-operation on Environment and Development (1998-1999), 158; Navid, see note 17, 815.

s8 International Convention on the Establishment of an International Fund for Compensation of Oil Pollution Damage, UNTS Vol. 1110 No. 17146; on the separate fund set up pursuant to the 1992 London Protocol, see M. Jacobsson, "Oil Pollution Liability and Compensation: An International Regime", Uniform Law Review, New Series 1 (1996-2), 260 et seq. 59 Supplementing the civil liability regime established by the 1969 Brussels Convention, UNTS Vol. 973 No. 14097, and related funds of the shipping industry (TOVALOP 1969 and CRISTAL 1971); ILM 8 (1969), 497 et seq., and 10 (1971), 137 et seq. See R. Ganten, International System for Com- pensation of Oil Pollution Damage, 1981; B.P. Herber, "Pigovian Taxation at the Supranational Level: Fiscal Provisions of the International Oil Pol- lution Compensation Fund", Journal of Environment and Development 6 (1997), 110 et seq.; Annual Report on the Adivities of the International Oil Pollution Compensation Fund, 1998. 60 ILM 28 (1989), 657 et seq.; see P. Lawrence, "Negotiation of a Protocol on Liability and Compensation for Damage Resulting from Transboundary Movements of Hazardous Wastes and their Disposal", Review of European Community and International Environmental Law 7 (1998), 249 et seq., (252). 61 See H. Smets, "COSCA: A Complementary System for Compensation of Accidental Pollution Damage", in: P. Wetterstein (ed.), Harm to the Envi- ronment: The Right to Compensation and the Assessment of Damages, 1997, 223 et seq.

62 See P.H. Sand, "UNCED and the Development of International Environ- mental Law", Yearbook of International Environmental Law 3 (1992), 3 et seq., (15); Sand, "International Environmental Law After Rio", EJIL 4 (1993), 377 et seq., (389).

63 Article 4 of the 1994 Framework Agreement, see note 40; i.e., ultimately under the weighted-voting system of the World Bank's 24-member Board of Executive Directors, where Brazil represents one of three Latin Ameri- can constituencies. 64 World Bank, see note 47, 12. 65 Adapted from the tables in United Nations Handbook 1998, 342 et seq., and in the GEF Draft Annual Report, GEF/C12/13 (1998), 57; RFT figures reflect trust fund contributions received by 1998. The excerpt from the UN scale of assessment omits Russia and is not prorated to the actual number of GEF donors; percentage figures have been rounded in both scales.

66 Though giving countries an option between "compulsory" and "volun- tary" contributions, the assessment system is in practice mandatory for both categories; S. Lyster, International Wildlife Law, 1985, 208 et seq., (230).

67 GEF, Operational Strategy, 1996, 64; see P.H. Sand, "The Montreal Re- gime : Sticks and Carrots", in: Le Prestre, Reid and Morehouse, see note 21, 107 et seq., (109); and see note 120. 68 GNP in 1993 dollars, as further illustrated by Silard, see note 29, 653 fn.194. 69 See notes 24 and 45. » See note 48. It is envisaged that there will be "a broad balance" in the num- ber of PCF projects to be undertaken in the two country groups; World Bank, see note 47, 16.

71 E.g., see V. Shiva, "Global Environment Facility: Perpetuating Non- Democratic Decision-Making", Third World Economics, 31 March 1993, 17 et seq.; B. Rich, Mortgaging the Earth: The World Bank, Environmental Impoverishment, and the Crisis of Development, 1994, 175 et seq.; and J. Gupta, "The Global Environment Facility in its North-South Context", Environmental Politics 4 (1995), 19 et seq. 72 See note 34. �3 See K. Horta, "The World Bank and the International Monetary Fund", in: Werksman (ed.), see note 34, 131 et seq.; LA. Bowles and C.F. Kormes, "Environmental Reform at the World Bank: The Role of the U.S. Con- gress", Va.J.Int'lL 35 (1995), 777 et seq., (836). 74 IBRD Resolution 93-10, ILM 34 (1995), 503 et seq.; see I.F.I. Shihata, The World Bank Inspection Panel, 1994, 41 (confirming that the resolution also applies to GEF projects implemented by the World Bank). 75 See Lin Gan, "The Making of the Global Environment Facility: An Actor's Perspective", Global Environmental Change 3 (1993), 256 et seq.; and J. Werksman, "Consolidating Governance of the Global Commons: Insights from the Global Environment Facility", Yearbook of International Envi- ronmental Law 6 (1995), 27 et seq. 76 J.D. Werksman, "Greening Bretton Woods", in: P. Sands (ed.), Greening International Law, 1993, 65 et seq., (84). 77 G. Handl, "The Legal Mandate of Multilateral Development Banks as Agents for Change Toward Sustainable Development", AJIL 92 (1998), 642 et seq.

78 B. Urquhart, A Life in Peace and War, 1987, 119: "There was, and is, as lit- tle chance of the Secretary-General coordinating the autonomous special- ized agencies of the UN system as King John of England had of bringing to heel the feudal barons." �9 See text following note 62. so See R. Mott, "The GEF and the Conventions on Climate Change and Biological Diversity", International Environmental Affairs 5 (1993), 299 et seq.; Boisson de Chazournes, see note 51, 194 et seq.; and Ehrmann, see note 29, 599 et seq. The "MoU" formula bypassed the opinion of the UN Office of Legal Affairs as to the GEF's incapacity to conclude a more for- mal agreement; see note 85. 81 See A. Wood, "The Global Environment Facility Pilot Phase", Interna- tional Environmental Affairs 5 (1993), 219 et seq.; D. Fairman, "The Global Environment Facility: Haunted by the Shadow of the Future", in: Keohane and Levy , see note 6, 55 et seq.; De Sombre and Kauffman, see note 22. 82 See the report of the second independent evaluation carried out prior to the 1998 replenishment of the GEF: G. Porter, R. C16menqon, W Ofosu- Amaah and M. Philips, Study of GEF's Overall Performance, December 1997. On the MPMF, see F. Biermann, "Financing Environmental Policies in the South: Experiences from the Multilateral Ozone Fund", Interna- tional Environmental Affairs 9 (1997), 179 et seq.

83 Decision VI/16, Yearbook of International Environmental Law 5 (1994), 937. The language of the decision not withstanding, the Fund's legal per- sonality presumably remains that of the United Nations, even though the MPMF may have the legal capacity to enter into contracts, to acquire prop- erty and to institute legal proceedings. 84 See P.H. Sand, "The Potential Impact of the Global Environment Facility of the World Bank, UNDP and UNEP", in: Wolfrum, see note 20, 479 et seq.; and J. Werksman, "Consolidating Governance of the Global Com- mons : Insights from the Global Environment Facility", Yearbook of Inter- national Environmental Law 6 (1995), 48 et seq. 85 Memorandum to the Executive Secretary of the UN Framework Conven- tion on Climate Change, 23 August 1994, annexed to Doc. A/AC.237/74 (1994); Text in: P.H. Sand, The Role of International Organizations in the Evolution of Environmental Law, UNITAR, 1997, 69 et seq.; Boisson de Chazournes, see note 29, 621; Ehrmann, see note 29, 593. 86 H.G. Schermers and N.M. Blokker, International Institutional Law, 3rd edition 1995, 27; and A. Klemm, "Die Global Environment Facility", Recht der Internationalen Wirtschaft 44 (1998), 921 et seq., (922). 87 Silard, see note 29, 644. Perhaps the term should be "international quasi- organization". 88 A. Chayes and A.H. Chayes, The New Sovereignty: Compliance with In- ternational Regulatory Agreements, 1996; R.B. Mitchell, "Compliance Theory: an Overview", in: Cameron, Werksman and Roderick, see note 23, 3 et seq.; M.A. Levy, O.R. Young and M. Ziirn, "The Study of Interna-

tional Regimes", European Journal of International Relations 1 (1995), 267 et seq., (283). 89 G.W Downs, D.M. Roche and P.N. Barsoon, "Is the Good News About Compliance Good News About Cooperation?", International Organiza- tion 50 (1996), 379 et seq.; G.W Downs, "Enforcement and the Evolution of Cooperation", Mich.J.lnt'lL 19 (1998), 319 et seq. 90 P.T. Stoll, "The International Environmental Law of Cooperation", in: Wolfrum (ed.), see note 20, 39 et seq., (80), using a term introduced in in- ternational regime analysis by A. Underdal, The Politics of International Fisheries Management: The Case of the North-East Atlantic, 1980, 36. 91 U. Beyerlin and T Marauhn, Lazv-Making and Law Enforcement in Inter- national Environmental Law after the 1992 Rio Conference, 1997, 160 (para. 26: "bezahlte Rechtsbeachtung" in the German original). 92 T. Marauhn and M. Ehrmann, "Workshop on 'Institution-Building in In- ternational Environmental Law: Summary of the Discussion", ZaoRV 56 (1996), 821 et seq., (827). 93 R. Falkner, "The Multilateral Ozone Fund of the Montreal Protocol", Glohal Environmental Change 8 (1998), 171 et seq., (173); and H.F French, Partnership for the Planet. An Environmental Agenda for the United Na- tions, Worldwatch Paper No. 126, 1995, 24. 94 See D. Brack, International Trade and the Montreal Protocol, 1996, 99 et seq.; and see note 120. 95 The term goes back to M. Olson, The Logic of Collective Action: Public Goods and the Theory of Groups, revised edition 1971, 51; and M. Olson,

The Rise and Decline of Nations, 1982, 21. See P.H. Sand, Lessons Learned in Global Environmental Governance, 1990, 6. 96 Text in the Report of UNCED, see note 7, 4. The wording of the principle was based in part on a statement by the 1991 OECD Ministerial Meeting in Paris, Yearbook of International Environmental Law 2 (1991), 529 (Doc. 24, para.5). Even so, the US delegation at Rio reserved its position on this and other principles of the Declaration, see Doc.A/CONF.151/26, Vol. IV (1993), para.16, and J. Kovar, "A Short Guide to the Rio Declaration", Colo.J.lnt'1 Envtl. L. &Pol'y 4 (1993) 119 et seq. See also Institut de Droit International, Resolution on Procedures for the Adoption and Implemen- tation of Rules in the Field of the Environment, Strasbourg 1997, article 4 (noting "the differences in the financial and technological capabilities of States and their different contribution to the environment problem"). 97 See note 24; R. Wolfrum, "Means of Ensuring Compliance With and En- forcement of International Environmental Law", RdC 1998, (forthcoming), conclusions. 98 Sand, see note 62, 8; see also R. Ricupero, "Chronicle of a Negotiation: The Financial Chapter of Agenda 21 at the Earth Summit", Colo.J.lnt'1 EnvtL L. &Pol'y 4 (1993), 81 et seq.; and B.I. Spector, "The Search for Flexi- bility on Financial Issues at UNCED: An Analysis of Preference Adjust- ment", in: B.I. Spector, G. Sjostedt and I.W. Zartman, Negotiating Interna- tional Regimes: Lessons Learned from the United Nations Conference on Environment and Development, 1994, 87 et seq. 99 A. McNair, The Law of Treaties, 1961, 29. too E.g., the 1994 International Tropical Timber Agreement, ILM 33 (1994), 1014 et seq.; D. Konig, "New Approaches to Achieve Sustainable Manage- ment of Tropical Timber", in: Wolfrum, see note 20, 337 et seq., (352). 101 K. Kummer, "Providing Incentives to Comply With Multilateral Environ- mental Agreements: An Alternative to Sanctions?", European Environ- mental Law Review 3 (1994), 256 et seq., (260); W Lang, "Is the Protection of the Environment a Challenge to the International Trading System?", Geo.lnt'lEnvtl. L.Rev. 7 (1995), 463 et seq., (475).

102 See generally D.M. Magraw, "Legal Treatment of Developing Countries: Differential, Contextual, and Absolute Norms", Colo.J.lnt'l EnvtLL.f� Pol'y 1 (1990), 69 et seq.; V.P. Nanda, "International Environmental Pro- tection and Developing Countries' Interests: The Role of International Law", Tex.lnt'1L.J. 26 (1991), 497 et seq.; J. Ntambirweki, "The Develop- ing Countries in the Evolution of International Environmental Law", Hastings /Mt'/<&Co�'.Z..��. 14 (1991), 905 et seq.; H. Beck, Die Differen- zierung von Rechtspflichten in den Beziehungen zwischen Industrie- und Entwicklungsldndern, 1996. to3 See generally B. Simma, "Reciprocity", in: R. Bernhardt (ed.), Encyclopedia of Public International Law, 7 (1984), 400 et seq., and Vol. 4, 1999, 29 et seq.; and R.O. Keohane, "Reciprocity in International Relations", Interna- tional Organization 40 (1986), 1 et seq. 104 Article 20 para.4 of the Biodiversity Convention is almost identical (see note 24), as both are based on similar language in article 5 para.5 of the Montreal Protocol as amended in 1990 (see note 19). 105 D. Hunter, J. Salzman and D. Zaelke, International Environmental Law and Policy, 1998, 472. 106 Klemm, see note 86, 925. lm Stoll, see note 90, 90. 108 Boisson de Chazournes, note 29, 630 ("condition a effet suspensif").

109 L. Boisson de Chazournes, "The United Nations Framework Convention on Climate Change: On the Road Towards Sustainable Development", in: Wolfrum (ed.), see note 20, 285 et seq., (299). 110 Beyerlin and Marauhn, see note 91, 129; see also T. Marauhn, "Towards a Procedural Law of Compliance Control in International Environmental Relations", ZaoRV 56 (1996), 696 et seq.; and J. Werksman, Responding to Non-Compliance under the Climate Change Regime, OECD Information Paper, OECD: Paris 1998. 111 Beyerlin and Marauhn, see note 91, 130. 112 UNTS Vol. 1155 No. 18232; ILM 8 (1969), 679 et seq. 113 Simma, see note 12, 352; and Simma, "Reflections on Article 60 of the Vi- enna Convention on the Law of Treaties and Its Background in General International Law", OZoRV 20 (1970), 5 et seq. See also D.W. Bowett, "Economic Coercion and Reprisals by States", Va.J.lnt'lL 13 (1972), 1 et seq., (11); and K. Sachariew, "State Responsibility for Multilateral Treaty Violations: Identifying the 'Injured State' and Its Legal Status", NILR 35 (1988), 273 et seq. 114 See M. Koskenniemi, "Breach of Treaty or Non-Compliance? Reflections on the Enforcement of the Montreal Protocol", Yearbook of International Environmental Law 3 (1992), 123 et seq., (140, 153). 115 See note 23.

116 See generally S. Rosenne, Breach of Treaty, 1985; and J. Setear, "Responses to Breach of a Treaty and Rationalist International Relations Theory: The Rules of Release and Remediation in the Law of Treaties and the Law of State Responsibility", Va.L.Rev. 83 (1997), 1 et seq. lm See D.G. Victor, "The Operation and Effectiveness of the Montreal Proto- col's Non-Compliance Procedure", in: D.G. Victor, K. Raustiala and E.B. Skolnikoff (eds), The Implementation and Effectiveness of International Environmental Commitments, 1998, 137 et seq.; Sand, see note 84, 496. lls M.E. O'Connell, "Enforcing the New International Law of the Environ- ment", GYIL 35 (1992), 293 et seq., (319) (withholding of financial assis- tance as "retorsion"). 119 See note 95. On the need to keep a balance of incentives and disincentives to discourage free-riding, see H.F. Chang, "Carrots, Sticks, and Interna- tional Externalities", International Review of Law and Economics 17 (1997), 309 et seq., (320). On the need also to keep the "stick" of general international legal sanctions for breach of a treaty, see M. Koskenniemi, "New Institutions and Procedures for Implementation Control and Reac- tion", in: Werksman, see note 34, 236 et seq., (248) (quoting Sir Robert Jennings). 120 Decisions VII/15-19 (1995) and VIII/22-25 (1996); Victor, see note 117, 155 et seq.; J. Werksman, "Compliance and Transition: Russia's Non-Compli- ance Tests the Ozone Regime", ZaoRV 56 (1996), 750 et seq. 121 See note 67. However, at their tenth meeting (Cairo, November 1998), the Parties to the Montreal Protocol recommended continued GEF assistance for eight successor countries of the former Soviet Union, while cautioning

them that stricter measures will be imposed if they do not adhere to their new benchmarks for phase-out of ozone-depleting substances; IISD, see note 44. 122 See note 45; Werksman, see note 46, 156. 1z3 See notes 48 and 70. Pursuant to its Operational Manual Statement on En- vironmental Aspects of Bank Work (OMS 2.36, May 1984, para. 9 lit. e), the World Bank "will not finance projects that contravene any international environmental agreements to which the member country concerned is a party"; Text in: I.F.I. Shihata, The World Bank Inspection Panel, 1994, 137 et seq. (141). Sand, see note 84, 493; Handl, see note 77, 658; and I.F.I. Shi- hata, "Implementation, Enforcement and Compliance With International Environmental Agreements: Practical Suggestions in Light of the World Bank's Experience", Geo.lnt'1 EnvtlL.Rev. 9 (1997), 37 et seq. (47). 124 See the Resolution on Periodic Reporting adopted by the 29th General Conference of UNESCO, as transmitted to the World Heritage Committee at its 21st Session, Naples 1997, WHC-97/CONF208/17, Annex V. 125 Downs, see note 89, 332 et seq., (342) (sequentially increased "depth of co- operation"). 126 E.g., the Montreal Protocol's ban on trade with non-Parties - the "stick" of article 4 para.l, see note 19 — may also be viewed as a "carrot", since it promises access to inter-party trade; Sand, see note 2, 10 fn. 57; A. Enders and A. Porges, "Successful Conventions and Conventional Success: Saving the Ozone Layer", in: K. Anderson and R. Blackhurst (eds), The Greening of World Trade Issues, 1992, 134 et seq.

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