Public Goals, Private Actors: Private Authority in Global Environmental Politics

1. Jessica F. Green Princeton University 16 October 2009 Presented at University of Texas, Austin, LBJ School of Public Affairs Public Goals, Private Actors:Private Authority in Global Environmental Politics

2. Research Questions • Are non-state (or private) actors increasingly important in world politics? • Under what conditions do private actors project authority in world politics?

3. Outline • Research Questions • Previewing the argument • Definitions • Patterns of delegated authority • A theory of private authority • The Greenhouse Gas Protocol: a case of entrepreneurial authority • Conclusions

4. Previewing the argument • Conventional wisdom on the rise of private actors is misleading. • Data show a power share rather than a power shift. • The full picture of private authority is incomplete unless we look at both delegated and entrepreneurial forms of private authority. • The theory presented here illustrates when we should expect private authority to emerge, and which form it takes.

5. Definitions Private authority: situations in which non-state actors make rules or set standards to which other relevant actors in world politics defer. (This is distinct from lobbying states or influencing public opinion.) • Delegated authority: a conditional grant of authority from a principal to an agent that empowers the latter to act on behalf of the former (Hawkins et. al 2006). • Entrepreneurial authority: a set of practices that governs the behavior of actors in world politics without explicit delegation of authority by states.

6. Delegated authority: the dataset • Newly created dataset, using new software for qualitative data. • 152 multilateral environmental treaties (MEAs) • Treaty level data, 1902-2002 • Sub-treaty data, 1949-2008 • 2 dependent variables: • actor(s) responsible for a given policy function • policy function delegated (or not) • 5 policy functions: rulemaking, implementation, monitoring, adjudication, enforcement.

7. Figure 1: Policy functions delegated to private agents, treaty level, 1902-2002 (N=70)

8. Figure 2: Policy functions delegated to private agents, sub-treaty level, 1949-2008 (N=31)

9. Figure 3: Rates of delegation, treaty level

10. Table 1: Policy functions delegated solely to private agents Private agents are most often enlisted as “helpers”, when other actors (either states or IOs) are also charged with performing the same policy function.

11. Figure 4: More functions, and more actors responsible for them

12. Existence of private expertise (scope condition) Demand for benefits by states or by other actors Deference to private actors: delegated or entrepreneurial authority Demand for benefits transforms private expertise into private authority Figure 5: Causal model of private authority

13. Benefits of private authority • Reduced transaction costs • Credible commitments • First mover advantage • Enhanced reputation

14. Theory: emergence of private authority H1: Recognition of anticipated benefits in the form of reduced transaction costs, credible commitments, first mover advantage or improved reputation is a necessary, but not sufficient, condition for the emergence of private entrepreneurial authority. Depending on who defers, benefits may accrue to either states or private actors, or both.

15. Theory: emergence of private authority H1a: If presented with a public and private agent who can supply the same benefits (generally, an IO and a private actor), states will delegate to the IO. In other words, states will delegate to private actors if they can provide benefits that IOs cannot.  

16. Theory: form of private authority H2: Strong focal institution + Key states have similar preferences  private delegated authority. H3: Lack of focal institution (or a weak one) + Key states disagree  private entrepreneurial authority. Note: these hypotheses assume the existence of private expertise and a demand for benefits.

17. Table 2: Summarizing the theory

18. Part II: Entrepreneurial authority

19. Figure 6: Growth in FSC-Certified Forest area, 1995-2008 Source: FSC International

20. Figure 7: ISO 14001 Certifications 1995-2007 Source: ISO Survey 2000, 2003, 2004, 2005, 2007

21. GHG Protocol in brief • Created by the World Resources Institute (WRI) and the World Business Council on Sustainable Development (WBCSD). • Extensive consultations with NGOs, industry, government agencies. • Consultations began in 1998; first version published in 2001. • A set of standards to measure emissions at the firm level (as opposed to other efforts at national, project or facility level)

22. Uptake of the GHG Protocol • Emissions trading program: Chicago Climate Exchange • Very high uptake in voluntary reporting programs: • ISO-14064 • Industry protocols in cement, paper, aluminum • The Climate Registry: 41 US states, 6 Mexican states, all Canadian provinces • US EPA “Climate Leaders” Program • National reporting programs in developing countries: Mexico, India, Brazil, China

23. Benefits provided by GHG-P • First mover advantage. Head start on reporting before national and intergovernmental rules were in place. (Kyoto was still not in force.) • Reduced transaction costs.Through provision of a “how-to guide”, software and technical support on reporting. Also, raised the possibility of avoiding switching costs in the future. • Reputational benefits. Early movers could portray themselves as responsible global citizens serious about climate change.

24. Heterogeneous state preferences Whose preferences? EU and JUSCANZ. • Two key negotiating blocs, had opposing views on emissions trading, even after Kyoto was signed. What preferences? Emissions trading. • GHG accounting was widely viewed as a precursor to trading, preparing for future regulation. What consequences? No work on accounting. • States and IOs were not working on firm-level measurement tools, since no one knew what the political outcome of the conflict would be.

25. Focal Institution • Likely focal institution is the UNFCCC Secretariat, which is tasked with supporting all implementation related to UNFCCC and Kyoto Protocol. • Secretariat is focused on national level reporting (required under UNFCCC) and project-based accounting (precursor to the CDM) – but even these were thinly staffed. • No political mandate to work on developing firm-level tools.

26. Conclusions • To understand the breadth of private authority, must look at delegated and entrepreneurial forms: both types show growth over time. • Delegated authority in particular shows a powershare, rather than a power shift. • Private authority occurs when private actors have existing expertise, and can provide benefits that states or IOs cannot. • The form of private authority depends on the preferences of powerful states, and the existence of a focal institution.

27. Beyond environmental politics • Private authority is present in many other areas of world politics: Financial accounting, Bond and credit rating, Internet management, Privacy regulation, Labor practices, Security. • Challenge is to see whether there is systematic variation in the amount and form of private authority by issue area. • As global governance arrangements become more dependent on expertise, and more complex, we should expect to see more private authority.

28. THANK YOU

29. Public Goals, Private Actors:Private Authority in Global Environmental Politics Jessica F. Green Princeton University 16 October 2009 Presented at University of Texas, Austin, LBJ School of Public Affairs