Trade Provisions in MEAs: A Carrot to Join the Club?

• In Event: Unpacking the International Political Economy of Climate Change

Abstract

Multilateral environmental agreements (MEAs) frequently include trade-related provisions that discriminate between member and non-member countries to the treaty. Trade-related provisions include, for instance, restrictions on the extraction of natural resources, references to preferential trade agreements, restrictions on the consumption of specific goods, or facilitated access to natural resources. The resulting preferential treatment can constitute a club good for member countries to an MEA by increasing trade flows among them. This can, in turn, increase incentives to join the MEA for non-members. A telling example is the Montreal Protocol, which restricts imports from and exports to non-parties of chlorofluorocarbons. These trade provisions created an incentive for several countries relying on ozone-depleting substances to join the treaty. However, no large-N study has investigated the effect of MEA trade-related provisions on later accessions. This research question is important because providing trade-related incentive for accession is a central argument in Nobel laureate Nordhaus’ argument for the creation of climate clubs.

Using a novel dataset of trade provisions included in 654 MEAs concluded between 1945 and 2015, we analyze whether more trade-discriminatory MEAs obtain more accessions by former non-members over time. We distinguish between trade-liberalizing and trade-restrictive provisions. On the one hand, joining a trade-liberalizing MEA can be perceived as a potential gain for non-members. This is what we call the positive framing hypothesis. On the other hand, not joining a trade-restrictive MEA can be seen as a potential loss. This is what we call the negative framing hypothesis. We find that trade provisions in MEAs are associated with higher accession rates. This effect, however, is more prominent for MEAs with trade-restrictive provisions. This indicates that the negative framing has a stronger effect on countries’ decision to accede to an MEA. This result is robust to controls for the characteristics of the underlying MEA including parties’ average GDP, democracy scores, and provisions related to accessions.

This paper contributes to the literatures on environmental clubs, trade-environment politics, and institutional design. It provides important lessons on the types of MEA provisions that are attractive to countries when reflecting on joining environmental agreements and generates important insights for the ongoing debate on climate clubs.

Authors

• Clara Brandi, German Institute of Development and Sustainability (IDOS)

• Noémie Laurens

• Jean-Frederic Morin, Laval University

• Jakob Schwab