The Economic Case for an International Law of the Atmosphere

Abstract

In this paper economic theory is applied to the global atmospheric problems of greenhouse warming and ozone-layer depletion. Previous work by economists on the subject of environmental pollution has largely ignored the global dimension of the problem such as characterizes the greenhouse and ozone issues, thus resulting in the absence of an appropriate property rights basis for implementing economically efficient atmospheric utilization policies. The present analysis is an attempt to fill this void and, in so doing, to construct an economic basis for global atmospheric policies. Its analytical foundation will utilize such economic concepts as public goods and bads, externalities, common property resources, and Pareto-efficiency. The study will interact with the disciplines of international law and political science because of the relevance of political institutions and property rights to the analysis. The nature of the economic demand and supply for a clean global atmosphere is examined in section 1 and in section 2 the problems inherent in international collective consumption such as occurs in the utilization of the global atmosphere are considered. In section 3 the economist's Pareto-efficiency rule is applied as a basis for international agreements in pursuit of efficient atmospheric use and in section 4 global atmospheric policy options are considered within the parameters of contemporary international social choice institutions. The creation of a sovereign international body to implement an international law of the atmosphere that is founded upon the legal premise of global property rights to the atmosphere is recommended.