"It is only through international cooperation that we can make progress"

In this joint interview, Anne Peters and Axel Ockenfels discuss legal and economic approaches to tackling the global climate crisis

June 11, 2024

Addressing the challenges of climate change requires diverse knowledge. Researchers at the Max Planck Society are developing legal and economic solutions: Anne Peters, Director at the Max Planck Institute for Comparative Public Law and International Law in Heidelberg, focuses on human rights as an international law expert. Economist Axel Ockenfels, Director at the Max Planck Institute for Research on Collective Goods in Bonn, explores international climate cooperation as a game theorist and behavioral researcher. The interview reveals how the solutions proposed by economists and lawyers differ.

Interview: Petra Maaß

Preparations for the next UN Climate Change Conference (COP29) in November in Baku are already underway. The decisions from the last COP were made six months ago. We are at the halfway point. Will the next conference solve the climate crisis?

Axel Ockenfels: I am rather sceptical about that. Negotiations have been going on for about 30 years, and while significant progress has been made in some regions, global emissions continue to reach new record highs instead of rapidly and drastically declining. The core of the climate problem is a cooperation problem, and solving cooperation problems requires collective, reciprocal agreements, as we see with trade agreements, minimum corporate taxation, or disarmament treaties. Reciprocity protects the willing from free riders and incentivizes the unwilling to participate. However, international climate policy relies on voluntary self-commitments, the so-called Nationally Determined Contributions (NDCs). Research on cooperation and emission data suggests that the cooperation problem cannot be resolved quickly enough if each country independently defines what it will contribute.

Anne Peters: That’s not entirely accurate. The Paris Agreement does not imply that each country does whatever it wants to do. While it’s true that this treaty doesn’t impose individually quantified obligations on states to reduce their respective greenhouse gas emissions, it differs from the Kyoto Protocol, which specifically obligated only industrialized countries (excluding nations like China and India) to meet emission targets. The Kyoto Protocol approach didn’t work effectively. The Paris Agreement sets shared goals, such as limiting global warming to 2 degrees Celsius, preferably 1.5 degrees, above pre-industrial levels, and achieving climate neutrality by the mid-21st century, without allocating specific contributions necessary to meet these targets. Each party, however, is required to set, document, and publicize a national reduction contribution (NDC). Additionally, some legal scholars interpret certain provisions of the agreement as a progression obligation, meaning a duty to continually increase the national contribution. The mandatory publication of NDCs in a registry and the regular global stocktake are intended to create pressure through critical global public opinion. Transparency is considered a central mechanism to move closer to achieving the common temperature goal and climate neutrality by 2050, though it cannot guarantee or enforce the attainment of these goals.

Is this meant to create a positive feedback loop?

Ockenfels: Yes, but unfortunately, research on cooperation gives little reason for optimism as long as we rely primarily on individual ambitions to address a collective challenge. Behavioural research even suggests that climate selfishness can be more contagious than climate altruism, especially since unilateral measures can weaken the cooperation incentives of other countries if they do not lead to innovations. This can happen, for example, when energy-intensive companies invest in less ambitious countries or fossil fuels are consumed elsewhere. Recent election outcomes are not necessarily encouraging either.

Peters: This is the well-known "drop-in-the-ocean" argument that many countries use, such as Switzerland in response to the European Court of Human Rights (ECHR) ruling on the case of the Klimaseniorinnen (Swiss Senior Women for Climate Protection): "My share is only small". However, this argument has been rejected by all courts so far, including the German Federal Constitutional Court. The judges ruled that Germany cannot evade the constitutional mandate to take climate protection measures by pointing to greenhouse gas emissions in other countries. Instead, the Federal Constitutional Court argued that Germany should strengthen international trust through its own actions. The state must try to motivate other countries through international coordination by enhancing their trust in Germany’s commitment. This is especially important since, historically, the Global North—comprising the EU, the USA, Canada, Australia, and Japan—has accounted for over 50 percent of CO2 emissions from the mid-18th century to 2017.

Can Germany make a difference in solving the global climate problem?

Ockenfels: Yes, but to be successful and live up to our significant responsibility, we need to more effectively motivate others to join in. From the start of the German energy transition in 2000 to 2022, Germany’s share of global CO2 emissions has nearly halved. This development is partly due to the successful reduction of German emissions by around 230 million tons but also to the enormous increase in global emissions by about 11,600 million tons during the same period. I am convinced that we can do better. A key to success lies in research and innovation. When reliable green energy becomes cheaper than fossil energy, the transformation will be in the self-interest of all states and companies, and the cooperation problem will largely be solved. In fact, even a small fraction of the federal funding for building renovation, to give just one example, could trigger a massive innovation drive comparable to the funding volume of the entire Max Planck Society.

Peters: Bringing others on board and not focusing solely on Germany is precisely what international law aims for. This applies not only to climate issues, but also to numerous current social, economic, and ecological challenges. Issues like harmful and precarious working conditions, migration and refugee movements, corruption, organized crime, resource overuse, toxic waste, biodiversity loss, traffic congestion, and digital misinformation, to name a few, often have cross-border dimensions. We live in a globalized economy with worldwide supply chains, financial and data flows, and all their consequences. Therefore, we cannot do without international regulations. In a primarily nation-state organized world, states must and should take measures primarily within their own jurisdictions. However, they must also cooperate internationally because they cannot fulfil many public tasks alone due to their dependence on factors beyond their control

How can this be addressed?

Ockenfels: The question, in my opinion, is not whether we should do something—of course, we must make great efforts—but how. Should we focus all our ambitions on the German climate balance? Or would we serve climate protection and poorer countries better by ensuring that climate goals are achieved jointly with the international community? The latter is possible if we focus more on innovation and reciprocal cooperation. Research provides many suggestions in this regard. We are looking into funding and incentive mechanisms for innovations, blueprints for international CO2 minimum price agreements, climate clubs, and climate tariffs.

Peters: It is only through international cooperation that we can make progress. However, to be credible, we must also put our own house in order. Only then can we be a trustworthy cooperation partner. Even if Germany’s CO2 savings are small compared to the emissions of very large and growing economies, they are an indispensable part of an overall effort. Only in this way can we send a signal that motivates other countries to pursue their climate goals.

One challenge is climate-induced migration. Most refugees here have left their home countries due to political persecution or war. The uninhabitability of areas due to extreme heat or drought is not yet recognized as a ground for asylum. Are these people left unprotected?

Peters: People who relocate due to climate conditions and their impacts do not fit within the traditional definition of a 'refugee' in international law established after World War II. Hence, the term 'climate refugee' can be misleading. Refugees, according to the Geneva Convention, are individuals who face individual persecution based on their race, religion, nationality, membership in a particular social group, or political opinion. Natural occurrences do not constitute persecution. While some regional legal frameworks, notably an African refugee agreement, employ a broader definition of refugees, categorizing refugees as those fleeing events that 'seriously disrupt public order,' the UN High Commissioner for Refugees interprets this agreement dynamically, suggesting that under specific circumstances, fleeing due to climate-related events could confer refugee status under regional international law. There are also other legal approaches to protect those affected by climate, such as human rights.

For example?

Peters: The UN Human Rights Committee recently found that Australia had not sufficiently protected the rights of indigenous residents and small, low-lying Pacific islands under its jurisdiction. The traditional way of life of these people in small villages with subsistence farming, hunting, and fishing, as well as the care of their religious sites, is concretely threatened by rising sea levels and repeated flooding. Australia had delayed or abandoned the construction of dams. The committee held that the failure to take climate adaptation measures despite foreseeable, imminently serious impacts on the well-being of the affected individuals violated their rights to private and family life and additionally their right to enjoy their culture as an indigenous minority. The Human Rights Committee emphasized that Australia must provide remedies, including financial compensation, and that the state must prevent future impairments through active measures. Such a report is not a court judgment, but must be considered by Australia in good faith.

Where else can help be provided?

Peters: Perhaps the legal framework of refugee law isn’t entirely suitable. Instead, we might need to utilize tools from migration policy and migration law, as is the current strategy of the Federal Republic. These tools are better equipped to address slow and gradual processes such as sea-level rise or soil salinization. Within migration law, there exist some 'soft' arrangements, such as the Global Compact for Migration. Adopted by heads of state and government in 2018 as a solemn pledge at a state conference, this compact is not a formal international treaty like the Refugee Convention. Additionally, there are other forums, such as the 'Platform on Disaster Displacement.' This reflects a typical aspect of international law: the prevalence of many so-called soft instruments and 'soft' organizations, wherein not only states but also all stakeholders—governments, civil society actors, and crucially, the private sector—collaborate. In these forums, efforts are made to advance through self-commitments, memoranda, and similar mechanisms."

Mr. Ockenfels, are there economic approaches to mitigating these climate-related causes of flight?

Ockenfels: The most important thing is to limit climate change. If this is not sufficiently successful, it might be possible to communicate migration not only as a challenge but also as part of the solution. There is evidence that a certain level of migration can be beneficial for all involved: migrants can increase their wealth, often benefiting people in their home countries as well. The host country can also benefit from the incoming workforce. Provided that migration policy is well-organized, this perspective could contribute to constructive solutions.

But flight is also a matter of financial resources…

Ockenfels: Exactly, and that is my greatest concern. Climate change will not only lead to more migration, but also to more people losing the financial means to relocate to other regions due to wealth losses. These people are no less in need of our help. While there are plans to provide funds to address climate damages in the poorest countries, I still see a big question mark. Not because it’s not morally imperative, but because there are doubts whether wealthy countries will actually be willing to contribute. The previous willingness to participate in redistribution programs for the poorest regions of the world has been disheartening. Here, too, we need to look beyond our own interests and think about more effective incentive structures.

More negotiations or more action? What is needed now?

Peters: Both!

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