The Pursuit of Relative Gains in Regard to Climate Change

International Relations is a large field of study that has over time sparked several great debates concerning the actions of states, the presence of anarchy, and the meaning of power. Within the realm, two specific contemporary approaches have come to dominate the discussion about International Relations theory, they are neorealism and neoliberalism. Each of these schools of thought carries with them distinct differences in their ideologies and overall views of the international arena and the actors which comprise it. The root at both of the aforementioned theories holds the same: the worlds constant state of anarchy. The international arena is comprised of several independent states who are at all moments each seeking to maximize their own individual security and interests (Powell 1991, 1303). Where neorealism and neoliberalism develop their core differences arises only after first acknowledging their key similarity, anarchy. The first significant difference to note is how neorealism forms its arguments for how the world works based on its state-centric structure while neorealism strays from this view and rather upholds a mixed-actor model which includes the role of international organizations, non-governmental organizations (NGO’s), multinational corporations and other non-state players (Powell 1991, 1304). The neoliberal view provides a more modern approach to international relations and thus incorporates several more actors and factors to the perceived actions of states than predominantly acknowledging military and diplomatic issues as neorealism focuses on (Powell 1991, 1304). In accordance with this, they concern themselves with absolute rather than relative gains in international interactions. Neoliberals believe that states are “rational egoists” and individualistic to the extent that they define their interests in terms of individual gains and are unconcerned with relative gains. Conversely, neorealists see it as a zero-sum game rather than a non-zero sum game and thus value relative gains instead (Powell 1991, 1306). The relative gains notion is based on the educated belief that states are constantly competing with one another and with this competition comes the incentive to cheat or the chance to be cheated (Powell 1991, 1306). On the other hand, the absolute gains notion is based on the belief that states are overall better off when they cooperate with each other as a result of the bounties of comparative advantages (Powell 1991, 1304). This debate between the two schools of thought ultimately poses the question: In the modern global political economy, is state behavior best explained by an absolute or relative gains perspective? I argue that while climate change politics is heavily influenced by the presence of institutions and non-governmental organizations, states are highly aware of and sensitive to relative gains concerns concerning a potential shift in their power status, therefore, the modern global economy is best described by the neorealist relative gains perspective.

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In this essay, I will first introduce the case study of climate change and its importance to our modern global political economy. I will follow this by explaining the liberal or absolute gains application to climate change politics, succeeded by a brief explanation of relative gains concerns stemming from realist theories. Ultimately, I conclude that realist and relative gains driven explanations of climate change better explain our current global system due to power-seeking goals. I will do this through measuring the countries involved perceived theoretical power in relation to other nations upon actions related to climate change mitigation. Theoretical power can be described as “the ability for policies and institutions [of a state] to determine the rate and direction of national incentive activity – the ability for outcomes to be influenced by a “causal force”” (Taylor 2016, 139).

The global system of industrial production brought several improvements that benefited international trade, the overall well-being of countries, and increased production capacity to rates never before achievable pre-industrialization; however, the expansive destructiveness of its long-term ecological effects was never fully understood or recognized until the late twentieth century (Oppenheimer 2016, 12). The imminent dangers to Earth’s prosperity as a result of factors including the continued emission of greenhouses gasses are very well known about today, but this has not stopped the human race from creating or attempting to reduce these environmentally harmful gasses. In 2019, there was an estimated 400 parts per million of CO2 in the atmosphere, (Oppenheimer 2016, 19). The Intergovernmental Panel on Climate Change found that the earth is warming at alarming rates due to human activity, especially the consumption of fossil fuels (Oppenheimer 2016, 18). Furthermore, they predict that global warming will trigger widespread flooding of coastal regions, extreme weather such as droughts and hurricanes, and the disruption of food supplies (Oppenheimer 2016, 21). It is well known that change is best implemented through policy, so we as humans must make immediate and urgent changes to our policies and approaches to ecologically impactful issues. Unfortunately, this is much easier said than done. It is increasingly more difficult to confront this grand challenge when the countries that will likely be hurt the most by climate change are significantly less wealthy, less developed, and more marginalized than the greater global powers with the full ability to take large-scale action.

Although climate change is now a collective concern whose detrimental effects will be felt by the entire world, one state, no matter how powerful it may be, does not have the individual capability to solve this global issue without cumulative cooperation from other nations

to provide effective global environmental security. The issue that arises from this situation is the contrasting viewpoints of the several nations that comprise the international system (Newell 2008, 509). The more advanced countries maintain a stance on climate change highly influenced by their political interests, while the less advanced countries tend to consider the morals of the situation rather than their own national interests (Newell 2008, 508). This situation ultimately aligns closely with the anarchical identity of the world as seen by liberals and realists alike. Both schools of thought are applicable to climate politics because addressing climate change and global warming brings with it problems of conflict and cooperation. They each have their own distinct view and explanation in explaining the extent to which complete cooperation is possible to address the issue at hand based on the gains the actors are pursuing. Climate change is inherently both an economic and a political issue, its roots stem from power, morality, and financial interests (Newell 2008, 510). Even though immediate change is theoretically possible, realistically, it creates the problem of which states would bear the short, medium, and long term financial costs that come with significant action that would occur from the changes (Bulkeley 2010, 230). If states to pursue absolute gains always, climate change politics would be a much simpler issue. However, because this is not the case, and states are interested in relative gains, it becomes a harder problem to address. 

In response to climate change, several NGOs, civil societies, and governmental institutions have implemented legislation and other proactive actions towards saving our planet. Liberalism best explains these efforts, specifically by legitimizing the existence of key international environmentally related institutions including the Kyoto and Montreal Protocol’s and the United Nations Framework Convention on Climate Change (UNFCCC). Realism does a poor job at explaining this because it claims that while these institutions may exist and help reduce anarchy to an extent, the international system remains virtually unchanged by them and they hold no real power over sovereign states (Powell 1991, 1306). The Kyoto Protocol, first introduced in December of 1997, was the first real international effort to regulate emissions of greenhouse gases, it was introduced as an amendment to the UNFCCC (Von Stein 2008, 243). Essentially, it was an international agreement with countries such as the United Kingdom, Japan, Russia, and the United States. It sought to target and reduce industrialized countries greenhouse gas emission levels (Von Stein 2008, 246). In 2001 however, the United States withdrew from the agreement. This was a significant event for the protocol and it has been historically attributed to the blatant influence from fossil fuel lobby groups financial interests (Von Stein 2008, 247). It is also notable how the United States, as a great world power, is able to make their own rules and decisions in this matter regardless of the European Union’s pressure to comply due to their hegemonic status. It can be well argued that this withdrawal of support was an act towards relative gains over China by the United States. The increased tensions that arose between China and the U.S. during the Cold War continued on long after this period, as seen in the U.S.’s actions with the Kyoto Protocol (Von Stein 2008, 250). The Protocol would come with high costs of implementation for the United States, which would ultimately set the precedent for China to make gains in competitiveness (Von Stein 2008, 250). Another reason for the U.S.’s withdrawal was the lack of an agreement signed by developing countries to reduce their emissions, in this event, the developing countries were acting in a neorealistic manner, with their own national interests in mind. Less developed countries often create their share of greenhouse gas emissions through facilities that are necessary to provide the essentials of daily life (electricity, heating, and plumbing) to their citizens (Bulkeley 2010, 230). With an already limited and small national budget, the costs of implementing climate changing measures comes with too high a price tag and thus is against their self-interests and negatively risks their relative gains acquisitions (Bulkeley 2010, 231).

Climate change negotiations have also over time sometimes proven to have fostered more cooperation than the division that realist theory would predict. Realism sees this climate issue to be mainly motivated by power politics and national interests, but this has at times been the opposite of actual state actions (Von Stein 2008, 246). After the most powerful nation and the largest contributor of GHG emissions, the United States, pulled out, Russia joined in 2005, and the Kyoto Protocol was able to remain relevant without the U.S.. Realist’s theory of relative gains would incorrectly predict that without the United States’ support, the Kyoto Protocol would be rendered ineffective. This is because of the Hegemonic Stability Theory which holds that stability is provided by the presence of a dominant power (Milner 1998, 112). Realism is ineffective in predicting this because of its limited acknowledgement of NGOs and other institutions. Liberalism’s more inclusive agenda better depicts the current international system as it accounts for the outside forces involved in this dilemma. Cooperating in large-scale climate change measures internationally is not a matter of benefitting a single or a few of the top states, rather it is an issue that would affect, either positively or negatively, the entire globe. This being said, more liberal leaning policies where states concern themselves with absolute gains rather than the current reality where they are more concerned with relative gains would make for easier cooperation and thus make it easier to come together and work towards mitigating the detrimental effects that accompany climate change.

The issue of climate change is one with deep roots in power, money, and interests. Realism holds that states will seek to maximize their own security or national interests and are not necessarily interested in cooperating with each other (Grieco 1988, 487). With this issue affecting the entire world regardless of power status, realist theory predicts that because of relative gains, even with cooperation resulting in absolute gains for everyone, it may be difficult to swiftly execute because of the uneven distribution of the relative gains (Grieco 1988, 487). This realist theory is one explanation for why climate change negotiation has been so difficult for cooperation within politics. In the case of climate change, the benefits of cooperation go a lot farther than just national interests and the costs would be taken on by states in order to avoid the eventual greater catastrophe to our planets entire ecosystem and the overall wellbeing of mankind.

Climate change politics involves actors beyond the states themselves, these include institutions such as the UNFCCC, this is in line with the liberal explanations of the international system. Since these non-governmental institutions have such great impacts on pushing environmental issues and legislation, liberalism best explains this part of climate change politics. Scholars have argued that institutions come together to establish a network of interactions which “will be difficult to either eradicate or drastically rearrange” (Sequeira and Reis 2019, 5). What Sequeira and Reis are saying with this is that when a treaty governing states is established, in this case, one regarding climate change, states involved with the treaty will be bound to it, limiting

their future actions, this can eventually lead up to policy convergence.  With this reasoning, the liberal viewpoint of absolute advantage best explains how climate change politics has come to be a relevant point of discussion for states regardless of it being governed substantially by other institutions. However, because these institutions do not provide a solution the problem at hand, they do not best explain the gains that are sought after by states in our modern global political economy in regards to climate change.

 There is a very prevalent problem with relative gains concerns amongst states in regards to climate change politics which poses great problems in making progress towards solutions (Falkner 2015, 585). Public goods include goods that are nonexcludable and non-rivalrous, the global climate is an example of one. If we look at it through a realist perspective and assume that states care about relative gains, environmental cooperation bringing nonexcludable results is potentially a source of drawback from states wanting to cooperate with one another because no relative gains would result and there is no way to exclude the free-riders. Cooperation thus triggers relative gains concerns. Highly industrialized powerful states are limited in the amount they will want to choose to participate based on these worries. They are discouraged from taking greater measures because although the benefits would be global, the costs would be heavily distributed amongst a concentration of the top countries in the world (Falkner 2015, 588). With climate change politics increasingly becoming more relevant of a topic within national governments, there is a clearer and more thorough understanding of the costs associated with the adaptation of environmentally friendly policies as well as a heightened nervousness to international resource transfers because of awareness of rising economies like China (Falkner

2015, 592). Weighing the relative gains versus the potential benefits, developed countries are more likely to pursue their own self interests and conserve their resources rather than implement new and costly policies in pursuit of absolute gains. In this situation states will also opt to maximize their own power and thus pursue relative gains which does not do much for climate change mitigation but best explains the priorities of states in the international arena when confronted with as grand an issue as climate change.

 The potential regulation of greenhouse gas emissions would also lead to a hefty shift in international resource transfers which would pose yet again another concern with relative gains for participating countries (Falkner 2015, 586). If these environmental sanctions are placed only on countries within the Organization for Economic Cooperation and Development (OECD) or the “Rich Countries Club”, issues of competitiveness would immediately arise as a result of the relocation of energy intensive industries to countries within East Asia, especially the aforementioned China and India. Even though international emissions trading under “perfect” cooperation has been studied and proven to benefit all actors, a few countries would receive undoubtedly higher relative gains than countries such as the United States, Japan, or those in the European Union would (Falkner 2015, 588). For realists specifically, this potential of China acquiring relative gains is not worth the benefits because they believe states should always be strong and ready for potential wars, and the upfront resource transfers that would occur through greenhouse gas reduction legislation would come at too great of a power cost to them. Therefore,

cooperation amongst all nations is highly unlikely as a result of relative gains concerns and an

indifference to absolute gains.

 In addition to relative gains concerns stemming from energy intensive industry

relocation, there is also tension regarding the predicted future costs of climate change damage. Just within the developing world, the United Nations evaluates mitigation costs to range around $200-$340 billion additionally each year (UNFCCC 2017) In the developing world this number decreases to $67-$130 billion per year, a still outrageous number (UNFCCC 2017). Currently, the twenty-three countries within the OECD contribute up to three times less to the Official Development Assistance Committee (ODA) than the predicted 0.7%-1.2% of their Gross National Income that would come as costs for mitigation and adaptation (UNFCCC 2017). The Montreal Protocol is an “international treaty designed to protect the ozone layer by phasing out the production of numerous substances that are responsible for ozone depletion”. It involves rich countries paying dues to also help developing countries develop and install more ozone-friendly technologies, it currently budgets $166 billion per year, significantly smaller than the additional financing needed annually to drastically slow down climate change (Falkner 2015, 590) (UNFCCC 2017). With climate change financial estimates increasing over time, countries are likely to begin to reweigh the benefits of investing in that versus investing in their own domestic capabilities. The extent to which we will see countries participating in climate change efforts is highly reliant on the gains they are ultimately seeking (Falkner 2015, 592). Because a nation’s adaptive capacity is a direct translation of their material power and status, it would be reasonable to expect to see the most powerful (or power-seeking) states pursuing domestic adaptation. This in turn makes them more secure and independent of the issues surrounding international adaptation.

 The cost of climate change on a global scale has been historically been reported in

absolute terms. The Stern Review found that “the estimated effects of even ambitious climate change policies on economic output are estimated to be small – around 1% or less of national and world product, averaged across the next 50 to 100 years” (Stern 2007, 248). Furthemore, it maintains that efforts towards mitigation would come at a cost much smaller than the ultimate global payoff, making countries eventually more willing to cooperate. When viewing climate change through an absolute gains perspective, the rising relevance and increased interest in preventing further damages by climate change is enough to encourage eventual cooperation. But our current global political economy has not developed that far and states continue to occupy themselves with seeking relative gains. Although relative gains concerns will always exist in a state of anarchy, climate change is an issue that can only be resolved through state cooperation and by all involved countries concerning themselves more with absolute gains over relative gains for the betterment of our planet.

In this paper I have discussed the several aspects of climate change negotiations, drawing attention to the costs of climate change, the threat of future damages by it, and the relative gains concerns associated with it. After reviewing climate change politics in relation to the global political economy, I claim that relative gains can best describe this issue as it falls within power-based explanations of international relations.

Works Cited

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Newell, P. (2008). The Political Economy of Global Environmental Governance. Review of International Studies, 34(3), 507-529.

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