New Legal Tools Needed to Preserve Earth

WHO is going to pay to keep the world environment safe? The answer has a lot to do with how people in different countries see the global environment.

A letter once came to the office of the United Nations Environment Program from a certain country saying that it was not going to pay to protect the ozone layer, because the ozone layer over its territory was not in danger.

We were surprised at the time. In retrospect it seems a less entertaining type of response. Happily, perceptions seem to be changing.

There seems to be some agreement that if the rain forests in Brazil, Indonesia, and Zaire are destroyed, then the world will have lost a resource that is important to all. If the world's food supply is threatened by global warming, that will be a problem for everyone.

Several countries come to us with an argument that goes like this. Rain forests are important to the whole world. The destruction of the rain forest will diminish the biodiversity that fuels the pharmaceutical industry. It will tamper with the mechanism that regulates the global climate.

Therefore, and here is where the argument gets strange, the United Nations should do something to make them stop it. The Brazilians, the Indonesians, and the Zaireans should be told to preserve their forests. The Chinese should be told not to burn coal. The Africans should be told not to let their lands become overgrazed.

There is no suggestion in any of this of who should pay the bill. Should the Brazilian slum dwellers stay at home and get sustenance from the moral satisfaction of having preserved the rain forest? Should the Chinese be asked to turn the heat down so that the rest of us can worry a little less about global warming?

Apparently. And when these countries - many of them very poor - object to the cost of taking these actions to save the environment, well-meaning people are horrified.

There is an extraordinary asymmetry in this new perception. On the one hand there is an acknowledgement that many of the world's environmental problems have global ramifications.

On the other hand there seems to be no perception that the world community - and particularly those who have the wealth to help - should do more than criticize those nations which are driven by poverty to destroy their natural patrimony.

What causes this perception? Why is it that the world community is so reluctant to address the problem of who should pay to save the world environment? Why do the poorest get the blame?

It is fashionable in certain circles to say that the problem lies with the free market. The rich nations - and the rich in the poor nations - are powerful, the argument goes, and they like to overconsume. In the words of economic theorist Adam Smith, "the chief enjoyment of riches consists in the parade of riches."

And so, indifferent to the fate of the poor and indifferent to the fate of future generations, they consume and they waste, and it barely occurs to them that they, of all people, should pay to clean up the mess their overconsumption has created.

The problem is that the market system is, in its highest form, the business of the optimal allocation of resources. It is the science, or at least the art, of arranging and rearranging one's assets in such a way as to maximize benefits.

Preserving biodiversity, preventing runaway climate change, stopping a flood of environmental refugees from threatening the dikes of global security - these are benefits that everybody recognizes. So why does the market not work to maximize them?

THE answer, of course, is that the world system is not really a free market. Benefits are not maximized because the market has failed.

It has failed in two major ways.

First, it has failed because of accounting systems.

Natural resources, such as clean air and fresh water, are treated as free goods. This notion, which had some validity in the 18th century, is a menace to life in the late 20th century. A walk along the main street of Mexico City or a look at the transport system in Cairo will tell you that. Yet there is no country in the world in which the national accounts attach any real scarcity value to these resources.

The result is simple. Countries, not pausing to think about the way in which value is ascribed to resources, destroy whatever natural resources they have.

In this Alice-in-Wonderland system of accounts, a single plank of felled timber shows a higher value than the preservation of a thousand forest species. Economists tell their political superiors that selling the products of felled forests must be good for the GNP and thus must be good for the economy.

The second great failure of the market is caused by a tough position on the concept of sovereignty.

Sovereignty could be considered a creation of the 17th century. It emerged from the very specific circumstances that ended the Thirty Years' War in Europe.

Under the concept of sovereignty a number of antagonistic states agreed that, seeing as nothing that one did within one's own territory actually affected life in any other state, it would henceforth be the business of that state alone. No more getting outraged by blasphemies and heresies committed next door.

The idea of sovereignty that grew out of the Peace of Westphalia served a vital purpose. It brought to a close the worst of the religious wars, and largely resolved - in favor of the state - the conflict of church and state in Europe.

But what has that got to do with melting icecaps, rising temperatures, collapsing ozone layers, and a flood of environmental refugees? Nothing at all, of course.

The premise of Westphalia is not only irrelevant to modern life, it is dangerous. To tell the inhabitants of low-lying countries vulnerable to sea-level rise that global warming caused in faraway places is none of their business is clearly irrational. It is irrational, but it is the legal matrix within which countries operate.

We are attempting to deal with 20th- century problems in the framework of a 17th-century order. The order cannot cope. At the United Nations we have to work within the order.

Sometimes the order does manage to cope - just.

After several years of negotiation there is a binding protocol to protect the ozone layer. There is also a $200 million fund to help developing countries 'leapfrog' the chlorofluorocarbon technologies that have done such harm to the ozone layer already.

The world community is also well on the way to conventions that will preserve bio-diversity and that will deal with the problem of climate change. These conventions should be ready for signing at the Earth Summit being held in Rio de Janeiro next year.

In a way these successes are heartening.

Nations sometimes do act before disaster strikes. But why must there always be an atmosphere of crisis surrounding the negotiations? Why can there be no system? Why must we constantly reinvent the wheel of ecological reason?

THE answer is that we have no tools - economic or legal - for appraising and setting right ecological problems as they arise. We have no tools because we are wedded to the economic and legal forms of the 17th and 18th centuries.

Environmental protection is still reactive rather than preventive. Under the present system it takes a crisis - some event so shocking that it cannot be ignored - to stimulate any serious interest.

Even then what scientists tell us can be glossed over by the soothing voices of economists and diplomats.

Economists frighten us with lopsided equations warning us of the cost of action, but rarely pausing to calculate the cost of inaction.

"Ecology" and "economy," which come from a single Greek root, are a single issue. We have forgotten that. They are held apart by economic and legal concepts that create a false distinction.

Until those tools are overhauled the environment - and our survival - will remain in peril.