Introduction Directory UMM :Data Elmu:jurnal:E:Ecological Economics:Vol36.Issue2.Feb2001:

1. Introduction

The essay is motivated and looks at two consid- erations based on the International Whaling Commission’s IWC recent efforts. The first is the failure of past and current management con- cerning whales as a global common resource. This failure also needs to be conceived within an eco- nomic framework — by developing a positive scrutiny of agreement failure aimed at assessing failure determinants. The second is the need for a normative analysis of international agreements, which is deemed necessary given the deadlock characterising global whale management since the ban on hunting was voted by IWC in 1982. 1 The deadlock, which has occurred since the ban was voted, is affecting the IWC annual meetings and actual management. IWC has hardly been search- ing for a feasible and party-shared new agree- ment. But differences in opinion amongst IWC members on how to manage commercial whaling, what techniques should be used and who should pay have not helped declining whale populations. The majority of IWC members refute whaling for scientific and ethical reasons Appendix A; their influential majority has voted both the 1982 ban and the creation of a whale sanctuary in the Indian Ocean in the early 1990s. On the other hand, whaling countries have been urging strongly for a resumption of whaling on purely scientific terms Monnesland et al., 1990; Amundsen et al., 1995; High North Alliance, and they have disre- garded the ban, either by exploiting existing loop- holes Japan or by refusing to subscribe to IWC majority decision Norway, Iceland. The dead- lock, that is the failure in creating a successful and enforceable treaty, is due to inadequate attention to the total economic value of whales and to its integration within institutional mechanisms and agreement rules structured on economic incentives. The current equilibrium achieved within IWC is unstable and not self-enforcing. 2 Furthermore, other marine mammals under IWC management could be included in a larger convention, giving further relevance to IWC reform Samples and Hollyer, 1990; Samples et al., 1986; Seligman et al., 1994. This adds relevance to some suggestions for re-forming or re-founding IWC, where the empha- sis is placed on turning a whaling con6ention into a whale con6ention. The self-enforcing nature of 2 The last IWC meeting in 1999 confirmed the unenforce- ability of the current International Environmental Agreements IEA equilibrium, and the invariance of positions assumed by countries. The 52 nd annual Meeting of the International Whal- ing Commission will be held in Australia in July, 2000. Among the issues of interest, the meeting will deal with whale killing methods and associated welfare issues; aboriginal subsistence whaling; socio-economic implications and small type whaling; whale watching, sanctuaries; and co-operation with other or- ganisations. These are ‘new’ issues, which have been ‘inter- nalised’ within IWC annual meetings. Among the other, ‘co-operation with other organizations’ is of great relevance and will deal with inconsistency and incompability between different IEAs. Currently, we observe a ‘paradigm shift,’ which has arisen during the 1990s with the inclusion of the above mentioned issues onto the agenda. It is not clear how the current bargaining on such values may lead to stable solutions by implementation of rules accepted widely. The current pro- cess seems far from achieving effective global management, from establishing a framework for dealing with marine mam- mals’ management. The position expressed by the UK fisheries ministry is clear, the country opposes a return to commercial whaling, both because even limited whaling can encourage illegal whalers, with a possibility that protected species would be hunted, and because whale meat is a luxury food, which does not find sufficient justifications. More sharply, the Prime Minister of New Zealand said she supported Greenpeace efforts to stop ‘scientific’ Japanese whaling. The implicit confl- ict between values is not manageable unless IWC is re-formed to take into account explicitly the whale socio-economic val- ues. It is noteworthy that a special session is also devoted to discuss ‘the Future of IWC’. It will be interesting to analyse on what basis IWC and its stakeholders are managing the transi- tion to a New Commission. The latest news is the IWC secretary proposing that commercial whaling should be al- lowed again for some species. The international community has reacted as usual, opposing parties stating that many countries reject adamantly the proposals they are reaping benefits from whale watching. After last season in the Antarc- tica, Japan has received formal diplomatic protests from sev- eral countries. The conflicts on values and economic benefits becomes steadily more explicit. 1 Which is not properly a ban, but an indefinite zero alloca- tion of individual shares, given that IWC is not empowered to vote on a ban. agreements concerning mixed and 6alue-conflicting goods is certainly an issue worthy of complemen- tary institutional and economic analysis. The analysis will focus on the following points, i to define to what extent consumptive use and non-use values should be accounted for when dealing with International Environmental Agree- ments IEA concerning whales and global mixed goods; ii the role and nature of institutions dealing with global issues; iii the role of bargain- ing between conflicting interests as a focal feature of institution-making process. The key points mentioned above will define what role economics can play with respect to whales and, more gener- ally, to marine mammals Eagle, 1996. The study has both positive and normative implications, and it is explorative in nature. It is also aimed at generating some controversy and further discussion. To develop a comprehensive and policy-ori- ented economic analysis, point i is necessary but not sufficient. Bulte and Van Kooten 1999 claim, ‘The assumed objective of the IWC, which regulated whaling primarily through the device of moral suasion, is to maximise the sum of use and non use benefits’. This assertion is valid 3 but not sufficient for policy purposes, as IWC does not possess coercive power over its members. It is necessary to analyse how conflicting values are bargained over, and consequently, by what means conflicts might be reduced Schelling, 1960; Raiffa, 1982. The management of natural re- sources, which have both consumptive and non- consumptive values, must be based on total value maximisation and bargaining. To be clear about what is intended by 6alue, I will refer to a stan- dard Hicksian measure of welfare. Bargaining outcomes are addressed comparing the equilibrium agreement in force, with a self- enforcing equilibrium, which also aims at max- imising — as far as it is possible — the total value of whales. The focus is both on economic efficiency and on self-enforcing features of bar- gaining solutions. The efficiency criterion requires that bio-ecological attributes should be considered along with monetary and non-monetary costs and benefits of preservation 4 Eggert, 1998. This also requires that economic and ethical considerations are to be included jointly and explicitly within the bargaining arena. Kaldor – Hicks criteria are suggested in order to value bargaining welfare implications Freeman, 1986; Kuronuma and Tisdell, 1993. This is con- sistent with both corner solutions one party man- aging the resource and interior bargained solutions consumptive exploitation and non-use values exercised together. I will recognise the need for implementing real compensations, in or- der to achieve self-enforcement. The weakness, instability and economic ineffi- ciency of the current IEA are underlined explic- itly. It is also highlighted how economic efficiency could be enhanced if monetary transfers between conflicting parties were allowed. Ethical implica- tions of monetary compensations are considered together with economic efficiency and policy-ef- fectiveness considerations Stahler, 1995, in order to discuss limits of economic efficiency arguments when ethics represent a major factor. As new rules are to be developed within a re-formed conven- tion, I investigate the possibility of introducing compensatory side payments into the bargaining arena, in order to increase economic efficiency with respect to a ‘ban’ scenario, sustained at present by side-trade threats. What I believe is necessary is to make opera- tional economic theory within the realm of global institutions. The main conclusion is that IWC should necessarily be re-formed or, better, re- founded, developing from a ‘whaling’ to a ‘whale’ convention. If the setting up of a new institution proves to be too difficult a task, room for reform exists even within the current IWC. For example, article V of International Convention for the Reg- ulation of Whaling ICRW states, ‘‘The amend- ments must be only such as are necessary to carry 3 It is valid, in a narrow sense, as the ‘functional value’ of the species should be taken into account as well. For a debate over the limits of conventional economics in addressing func- tional value, see Vatn and Bromley 1994. We assume nar- rowly that non-use value encompasses functional value. 4 For example, the 1973 US Endangered Species Act ignores any economic concerns. The Congress seems to be considering some cost – benefit balancing for inclusion in ESA listing. out the objectives and purposes of the Conven- tion and to provide for the conservation, devel- opment and optimum utilisation of the whale resource be based on scientific findings, and take into consideration the interests of the consumer regarding products and the whaling industry’’ Birnie, 1989, emphasis added. A re-definition of the notion of consumersusers within IWC is a necessary pre-condition for the future estab- lishment of a new convention Vogel, 1995. This article suggests that the history of the IWC, the first environmental organisation to be global in scope, points to the weaknesses in con- temporary environmental treaty regimes. Like the whaling convention, many environmental treaties are not well enforced and monitored Barbier et al., 1990; Blackhurst and Subrama- nian, 1992; Barrett, 1998.

2. The ‘whale’ global issue