trade war would likely ensue, damaging domestic
growth across nations. Hence a multilateral, more
complex approach, would likely lead to a more
optimal outcome. The multilateral response
would likely involve the linking of carbon markets through international accounting rules for
transferable carbon allowances or credits under
Article 6 of the Paris Agreement, or through the
Emissions Mitigation Mechanism (EMM).
Establishing the EMM would require extensive
negotiations and leadership from the big emitters,
such as China. Negotiations would likely take
considerable effort and time, longer than the
unilateral proposal of a border adjustment tax.
Case study 4: Oil spills
Oil spills and the environmental damage caused
by them is an international challenge, as oil
tankers cross borders and sea lanes and navigate
international waters. Oil spills are an example of
where an international response is stimulated by
a crisis or shock. In 1967, the UK took the
controversial decision to set fire to the shipwrecked Torrey Canyon supertanker to prevent
leaking oil from spreading. Although contained
within the borders of the UK, the oil spill also
contaminated 80 km of the French coastline;
hence the domestic action of the UK had a unilateral dimension to it. This led to several international conventions, including the recognition
of the right of coastal states to take unilateral
measures “to prevent grave and imminent danger
to their coastline from oil pollution”. In this
example, unilateral action catalysed multilateral
agreements and standards, which in turn protected the rights of states to act unilaterally. In
the 1970s, the USA unilaterally forced oil tankers
entering US ports to comply with double-hull
standards, catalysing the international adoption
of the 1973 MARPOL Convention and 1978
Protocol on maritime pollution, which extended
US standards internationally.
Case study 5: Chlorofluorocarbons and the
Montreal Protocol
A multilateral response stimulated by the perceived threat of unilateral trade sanctions can be
observed in the banning of chlorofluorocarbons
(CFCs) to prevent the depletion of stratospheric
ozone. As the hole in the ozone layer grew over
Antarctica in the early 1970s, the public became
concerned over increased skin cancer rates. By
the mid-1970s it had become clear that CFCs
were the cause. Between the mid-1970s and
1980s, led by the USA, several countries took
domestic action and imposed bans and reductions
in the use of CFC-based aerosols. International
negotiations had been underway for some time
but came to a head in the mid-1980s.
A key motivation of Europe and Japan to
reach an agreement was the fear that the USA
would take unilateral action and impose trade
sanctions, if talks failed. In 1987, the Montreal
Protocol was signed, with a clear tapering
schedule for the production and use of CFCs
globally. It should be noted, that another key
component on reaching an agreement was the
availability of substitutes for CFCs, which limits
the replicability of this approach in other areas,
and in particular climate change.
Nevertheless, the Montreal Protocol is widely
acknowledged as the world’s most effective
environmental treaty. 98% of the production and
consumption of ozone-depleting substances
(ODS) has now ended; and the ozone layer is
projected to recover to its pre-Antarctic ozone
hole state over the next 50 or so years, and to its
pre-industrial state in about 500 years. At the
same time, the Protocol has made a major contribution to slowing the rate of global warming:
almost all ODS, including CFCs and
hydrochlorofluorocarbons (HCFCs), are themselves powerful greenhouse gases, typically far
more powerful even than hydrofluorocarbons
(HFCs).
Special Report 5: International Energy Cooperation and Governance
697
growth across nations. Hence a multilateral, more
complex approach, would likely lead to a more
optimal outcome. The multilateral response
would likely involve the linking of carbon markets through international accounting rules for
transferable carbon allowances or credits under
Article 6 of the Paris Agreement, or through the
Emissions Mitigation Mechanism (EMM).
Establishing the EMM would require extensive
negotiations and leadership from the big emitters,
such as China. Negotiations would likely take
considerable effort and time, longer than the
unilateral proposal of a border adjustment tax.
Case study 4: Oil spills
Oil spills and the environmental damage caused
by them is an international challenge, as oil
tankers cross borders and sea lanes and navigate
international waters. Oil spills are an example of
where an international response is stimulated by
a crisis or shock. In 1967, the UK took the
controversial decision to set fire to the shipwrecked Torrey Canyon supertanker to prevent
leaking oil from spreading. Although contained
within the borders of the UK, the oil spill also
contaminated 80 km of the French coastline;
hence the domestic action of the UK had a unilateral dimension to it. This led to several international conventions, including the recognition
of the right of coastal states to take unilateral
measures “to prevent grave and imminent danger
to their coastline from oil pollution”. In this
example, unilateral action catalysed multilateral
agreements and standards, which in turn protected the rights of states to act unilaterally. In
the 1970s, the USA unilaterally forced oil tankers
entering US ports to comply with double-hull
standards, catalysing the international adoption
of the 1973 MARPOL Convention and 1978
Protocol on maritime pollution, which extended
US standards internationally.
Case study 5: Chlorofluorocarbons and the
Montreal Protocol
A multilateral response stimulated by the perceived threat of unilateral trade sanctions can be
observed in the banning of chlorofluorocarbons
(CFCs) to prevent the depletion of stratospheric
ozone. As the hole in the ozone layer grew over
Antarctica in the early 1970s, the public became
concerned over increased skin cancer rates. By
the mid-1970s it had become clear that CFCs
were the cause. Between the mid-1970s and
1980s, led by the USA, several countries took
domestic action and imposed bans and reductions
in the use of CFC-based aerosols. International
negotiations had been underway for some time
but came to a head in the mid-1980s.
A key motivation of Europe and Japan to
reach an agreement was the fear that the USA
would take unilateral action and impose trade
sanctions, if talks failed. In 1987, the Montreal
Protocol was signed, with a clear tapering
schedule for the production and use of CFCs
globally. It should be noted, that another key
component on reaching an agreement was the
availability of substitutes for CFCs, which limits
the replicability of this approach in other areas,
and in particular climate change.
Nevertheless, the Montreal Protocol is widely
acknowledged as the world’s most effective
environmental treaty. 98% of the production and
consumption of ozone-depleting substances
(ODS) has now ended; and the ozone layer is
projected to recover to its pre-Antarctic ozone
hole state over the next 50 or so years, and to its
pre-industrial state in about 500 years. At the
same time, the Protocol has made a major contribution to slowing the rate of global warming:
almost all ODS, including CFCs and
hydrochlorofluorocarbons (HCFCs), are themselves powerful greenhouse gases, typically far
more powerful even than hydrofluorocarbons
(HFCs).
Special Report 5: International Energy Cooperation and Governance
697