INTERNATIONAL RIVERS

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INTERNATIONAL RIVERS

• THE PROBLEMS OF COLLECTIVE ACTION

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International rivers are difficult environmental
challenges because of the one-way flow of water
and thus of the damages from upstream pollution.

• Inside of a nation, where law is given effect
  (enforcement) by a judiciary and the executive
  branch (the Environmental Protection Agency),
  rivers that pass through several jurisdictions
  (Wisconsin, Illinois, etc) are regulated by the
  larger entity of the federal government.
• Those of us in Wisconsin are not free to pollute
  such rivers and allow the damages to accrue
  downstream (in Illinois).
• In effect, the rivers in Wisconsin do not belong
  to the residents of Wisconsin but to the entire
  nation.

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But this is not the case for international rivers
for the simple reason that there is no
supra-national judiciary and executive agency to
force nations to be nice to natureand thus to
their downstream neighbors.

• One way to think of this is that international
  law is a contradiction in terms.
• And why do I say this? Because law requires not
  just rules but enforcement of those rules.
• In the international realm there is no
  enforcement mechanism.
• This is why in the international realm we have
  such things as treaties, conventions, protocols,
  and agreements. But the one thing we do not have
  is laws.

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Let us now consider pollution that moves from one
jurisdiction (one country) to another and
therefore creates a serious political challenge.

• We will assume that there is one upstream nation
  and several downstream nations.
• The upstream nation allows its firms to discharge
  pollutants into a river that then flows through
  the downstream nations until emptying into the
  sea.
• This means that there are pollution damages in
  the upstream country as well as in the downstream
  recipients of its pollution. Assume that none of
  the downstream nations dumps any pollutants.

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THE UPSTREAM-DOWNSTREAM PROBLEM

MDDS
MDP
MACP
c
d
e
a
g
f
b
E EP
Emissions of Country P
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As previouslyMACp is marginal abatement costs
in the polluting countryMDp is marginal damage
in the polluting country andMDDS is the
marginal damage in the downstream countries.We
know that if the upstream polluting country is
only concerned about the pollution damages in its
own country then it will seek to reduce emissions
to the point EP.At this point a serious problem
remains.
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Specifically, moving from Ep to E would reduce
damages in the polluting country by the amount f.
However, we see that moving from EP to E would
not be desirable for country P since to the left
of EP we see that the marginal costs (along MACP)
are greater than the marginal benefits in terms
of reduced pollution damages (MDP). That is,
MACP lies above MDP. Moving to the left of EP
would mean that country P would be paying more
than it is worth to reduce pollution.But there
is another way of looking at this problem.
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This alternative perspective reveals that the
several downstream countries harmed by country
Ps pollution have the ability to make country P
reconsider its calculations.That is, consider
the two regions d and c.We see that the region
d c represents the total reduction in pollution
damages (benefits of pollution reduction) in the
downstream countries.We also see that if
country P were indeed to undertake pollution
control all the way to E then its total costs
would be d f, while the total benefits of
pollution reduction within country P plus in the
downstream countries would be c d f.
Suddenly we see an opportunity to solve this
problem.
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That is, if all of the countries (the polluting
one plus its downstream victims) could but act
collectively (cooperatively) we see the economic
reality of fixing this vexing problem.Total
benefits to the entire group of moving from EP to
E are represented by c d f.Total coststo
be paid entirely by country Pare d f.If we
put this in a benefit-cost framework we would
find the NET benefits of collective action. That
is BENEFITS COSTS NET BENEFITS OF
COLLECTIVE ACTION
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This can be represented asc d f d
f cIn other words, the amount c is a net
economic surplus that can be used by the
downstream countries to induce (bribe) country
P to undertake greater pollution reduction than
it would be inclined to do in the absence of this
downstream pressure (and financial
inducement).Notice that as long as c is greater
than d then this will be enough to induce the
polluting country to move to the left of EP.
This is true because country P will gain
pollution reduction benefits of f but in the
absence of the payment from downstream countries
this reduction would not be undertaken since the
marginal cost of getting to E is greater than
the marginal reduction in pollution.
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The collective action discussed here would not be
forthcoming without some way to make sure that
all of the downstream countries agree to
contribute something to the upstream polluting
country.In addition, there will need to be much
effort devoted to how, exactly, payment of the
inducement cost c is to be shared among the
downstream countries.Usually, such squabbles
and disagreements are sufficient to preclude
effective collective action, and so international
rivers continue to carry massive pollution loads.
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There are several examples of successful river
compacts or treaties. Two stand out because
they involve a relatively few countries of
similar socio-economic circumstances. Indeed
Finland was, at one time, part of (ruled by)
Sweden.

• The Rhine River Commissions
• The Finnish-Swedish Frontier Rivers Commission

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Sadly, the norm is that such arrangements are
largely ineffective. The troublesome ones are

• The Colorado River Commission (U.S. and Mexico)
• The Danube River Commission (17 countries in
  western and central Europe)
• The Zambezi River in Africa (Zambia, Angola,
  Namibia, Zimbabwe, Mozambique, Tanzania,
  Botswana, and Malawi)
• The Niger Basin Authority in Africa (Guinea, Cote
  dIvoire, Mali, Niger, Burkina Faso, Benin,
  Nigeria, Cameroon, and Chad).
• The Plata Basin in South America (Argentina,
  Bolivia, Brazil, Paraguay, and Uruguay).