Issues with Markets, Distributive Justice & Agency Problems in International Environmental Law (Hidden Economics & Environmental Justice)

1/4 Regarding the OECD excerpted publication on the distributive effects of policy instruments, how do you understand the explanation that economic policy instruments commonly considered to be neutral in effect do have distributive consequences within a single country or location? How do the distributive consequences work, and why worry about the effects anyway, as long as overall efficiency is served? Is there any difference here between purely domestic versus international schemes employing economic policy instruments? For example, consider the various carbon offset arrangements in which developed countries may fund projects reducing net carbon emissions, etc. in developing countries, as a way to satisfy their own, higher obligations to reduce carbon emissions.

2/4 If you look closely at the Eskimo Whale Hunting case and the Japan Whaling Association website, you notice that both implicitly make cultural arguments concerning the environment (remember the Freeport McMoran complaint and the cultural genocide count), but are not entirely able to pull them off. The former tries to make the argument that modern Inuit oil workers are engaged in cultural activities pursuing endangered species of whales as the exercise of indigenous rights following in their grandfathers’ footsteps, but they come off more like Civil War reenactors because they have entered the modern economy already. In the name of Japanese culture, the later seemingly condones commercial whaling dressed up as scientific research, which argument other countries think does not even pass the straight face test. What is the cautionary lesson there for broad application of environmental or distributive justice argumentation based upon claims about present or past practices carried forward to the present?

3/4 Agency problems are something law students typically have already encountered no later than courses like business corporations law, presenting problem of an agent formally acting on behalf of a principal (theoretically with the principal’s best interests at heart), but in the meantime agents more often serve their own personal interests (think of CEOs effectively setting their salaries). The classic problem is that agents often have superior knowledge of facts on the ground compared to a principal, and so their performance is very difficult to monitor. But if the principal improves his knowledge and monitors the agent ever more closely, the whole process simply becomes too time-consuming. Such problems are endemic in the context of recent international environmental law with heavy involvement of non-governmental organizations or NGOs over governments. Who represents the ordinary citizen better, and why, a single-issue, specialized non-governmental organization, or ordinary government responsible generally for public welfare? Nonetheless, agency issues are typically ignored with NGOs, perhaps as a result of their customary non-profit status. And particularly in areas like climate change, where there may be a variety of competing interests and parties, and pressures to change very basic economic arrangements (for example, decarbonization of the economy), it is difficult to make informed choices even without interposing potentially conflicted agents. Thus, this is as much as anything else a sensitization exercise, to engender consciousness of the conflicts.  So please work through on an individual basis the John Q Public Problem.

4/4 Meanwhile, distributive justice concerns are not solely the province of international environmental law, but they are unavoidable as soon as challenges like climate change are recognized as requiring broad evolution in economic structures themselves (e.g., decarbonization of the economy), at the same time as the lasting conflict is recognized between different groups of states who may place more emphasis on improving or guarding their economic and social circumstances in the midst of change.  The descriptives of developing and industrialized states captures the tension, which also accounts for the idea that certain areas of law like international trade law and international environmental law are as much growing together as conflicting in certain areas.  We borrow border adjustment tariffs or taxes as one current area of technical concern from international trade law, and overlapping concerns it raises in international environmental law, by having a student group work on the Border Adjustment Taxes (Environmental Tariffs) Problem as well as students groups working over the balance of the semester generally on (not very simple) current domestic Charleston sea level rise issues, to get a sense for how hard it is to make a variety of decisions implicating distributive justice even in the purely domestic setting via the Charleston Problem.

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