Key points

  • Certain global environmental issues, such as global warming and biodiversity, spill over national borders and will need to be addressed with some form of international agreement.
  • Biodiversity is the spectrum of animal and plant genetic material.
  • International externalities are externalities that cross national borders and that cannot be resolved by a single nation acting alone.

An international perspective on environmental issues

Many countries around the world have become more aware of the benefits of environmental protection. Unfortunately, even if most nations took steps individually to address their environmental issues, it would still not solve certain environmental problems which spill over national borders.
Take global warming, for example—no one nation by itself can reduce carbon dioxide and other gas emissions enough to solve the problem. The problem is so big, nations must cooperate to effectively address it.
Another example is the challenge of preserving biodiversity—the spectrum of animal and plant genetic material. Although a single nation can protect biodiversity within its own borders, no nation acting alone can protect biodiversity around the world.
Global warming and biodiversity both are examples of international externalities—externalities that cross national borders and cannot be resolved by a single nation acting alone.

What should international environmental regulations look like?

Bringing the nations of the world together to address environmental issues requires a difficult set of negotiations between countries with different income levels and different sets of priorities. If nations such as China, India, Brazil, Mexico, and others are developing their economies by burning vast amounts of fossil fuels or by stripping their forest and wildlife habitats, then the world’s high-income countries acting alone will not be able to reduce greenhouse gases.
However, low-income countries, with some understandable exasperation, point out that high-income countries do not have much moral standing to lecture them on the necessities of putting environmental protection ahead of economic growth. After all, high-income countries historically have been—and are still today—the primary contributors to greenhouse warming through the burning of fossil fuels. It is hard to tell people who are living in a low-income country—where adequate diet, health care, and education are lacking—that they should sacrifice an improved quality of life for a cleaner environment.
If high-income countries want low-income countries to reduce their emissions of greenhouse gases, then the high-income countries may need to pay some of the costs. Perhaps some of these payments will happen through the private market—for example, some tourists from rich countries will pay handsomely to vacation near the natural treasures of low-income countries. Or perhaps some of the transfer of resources will happen through making modern pollution-control technology available to poorer countries.
The practical details of what such an international system might look like and how it would operate across international borders are forbiddingly complex. It seems highly unlikely that some form of world government will impose a detailed system of environmental command-and-control regulation around the world. As a result, a decentralized and market-oriented approach may be the only practical way to address international issues such as global warming and biodiversity.

Summary

  • Certain global environmental issues, such as global warming and biodiversity, spill over national borders and will need to be addressed with some form of international agreement.
  • Biodiversity is the spectrum of animal and plant genetic material.
  • International externalities are externalities that cross national borders and that cannot be resolved by a single nation acting alone.