The role of international agreements in environmental conservation and its implication to vietnam

TheoriesofCommonPoolResources

Environmental quality is a vital public good, necessitating an understanding of its characteristics to address environmental issues effectively Public goods can be categorized into pure public goods, congestive goods, and common pool resources (CPRs) Pure public goods, like defense and radio broadcasting, benefit all individuals without diminishing in quality regardless of consumption In contrast, congestive goods, such as public roads and bridges, become less efficient as more people use them, although their overall quantity remains unchanged CPRs, including clean air, water, and forests, are accessible to everyone but can suffer from depletion and quality degradation as usage increases These resources can be further divided into renewable and non-renewable categories, with the risk of exhaustion if consumption outpaces renewal.

AlthoughCPRscantosomeextentbehavelikeprivategoodsinaccordancewithecono mictheories,theoryanalysisofpublicgoodsfitsmoreinunderstandingthecharacteristicsofCP Rs.Therefore,itisrequiredtointroduceherebythetheoryofpublicgoods.

CommonPoolResources(CPRs)arethosethatarenotexclusivelycontrolledb y asin gleagent[Tietenberg,p.38].Theterm"common-poolresource"alsoreferstoa naturalorman- maderesourcesystemthatissufficientlylargeastomakeitcostlytoexcludepotentialbeneficiar iesfromobtainingbenefitsformitsuse[Ostrom,p.30].AccesstoaCPRcanbelimitedtoasingle individualorfirmortomultipleindividualsorteamsofindividualswhousetheresourcesystem atthesametime.

ItisnecessarytounderstandhowCPRsaretreatedinthemarketbecausethisisthestarti ngpointwhyenvironmentalresourcescannotbelefttothemarketforcesfortheirownconservat ion.Otherwise,noeffortswouldbeneededbyanyinternationalorganizations.

Fornormalprivategoods,thedemandandsupplyfunctioncanbeillustratedasshownintheFi gure1.1 Here,theamountofsupplyisexpectedtogrowaspriceofgoodsincreases.

However,forpublicgoods,especiallyforCPRs,theamountofsupply,accordinglythepricea swell,isnotaffectedbydemandchanges.

Figure1.1.and1.2.showthatQ‟‟>Q‟;therefore,CPRsarelikelytobepricedlowerandexploited morethanprivategoods

ThemaximumprofitisachievedwhereAR=MC;therefore,thequantitysuppliedtothemarket wouldbeQ1inthecaseofnormalprivategoodsasshownintheFigure1.3.

Thus,thepublicgoodsorCPRsareprovedtobeover- exploitedthanprivategoods,byMCandMR approachaswell 2

2The relationQ2>Q1isclearlyfoundbyFigures3-6.AlsonotethattherelationP1>P2isestablished.

TR=TotalRevenue,P=Price,TC=TotalCost,AC=AverageCost,AR=AverageRevenue,

Theimplicationofabovetendenciesofover- exploitationofpublicgoods(CPRs)forthesustainablemanagementoftheresourcescanbeillu stratedasshownintheFigure1.7.Inthis Figure1.7, theverticallineSrepresentswheretheresourcecanbemanagedtomaintainthesustainablegro wthlevel.IfconsumptionlevelleavestheenvironmentalamenityleveltotherightofS,the resourcecanbesustainablymanaged,andifconsumptionbringstheamenityleveldowntothele ftofS,theresourcesizeisnotcapabletosupportsustainablemanagementtheresources.Itshoul dbenotedthattheword

"sustainable"hasnotbeenclearlydefinedinthecasessomeoftheCPRssuchascleanair.Here,in ordertounderstandeasiertheenvironmentalconcernsrelatingtosuchCPRs,Sisconsideredtob ethelevelwheretheresourcescansatisfyallenvironmentaleconomicvalues.Therefore,below thispointtheCPRscapacitytomaintainglobalenvironmentalvaluesisnotsufficient.

Now,letusintroduceanewlineintheFigure1.7.toidentifythedesiredlevelofconsum ptionatwhichnaturalresourcesarecompletelyandself- sufficientlysustainableintheiroriginalnetamountonanannualbasis.

OS=0lineistheboundarywithinwhichthenetconsumptionofCPRsisalwayszeroornegative attheendofeachyear.Inotherwords,theconsumptionisbeingoffsetannuallybyitsnaturalrepr oductionbelowthisline.

Thus,OS=0lineisausefulnewtooltoillustratethelevelof„desirableconsumptionpoint.‟Thisc urveprovidesnewconceptwithregardtothesustainable management.

Further,thereisamoreimportantimplicationinthisFigure1.7relatedtoOS.Underthe definitionstatedabove,theslopeoftheOScurveisfoundtobeequivalenttothevelocityofresou rcereproduction.

Thisnewequation6eloquently tellsustherelationsamongthereproductionvelocity,sust ainablelevelandconsumption.

A‟istheoptimalindifferencecurvethattakesintoaccountthevalueofenvironmentalamenity.IftheindifferencecurvetouchesthePPC(ProductionPossibilityCurve)totheleftofSline,theresourcescanbe managedsustainably Thisisendorsedbytherelationd1C3isgenerallyco nsideredtrue. conservationandenactdomesticmeasures.

Gv=GlobalValueoftheResourceConservationPpContributionpaidbyProducingCountriesCp=Cont ributionpaidbyConsumingCountries

22While theFigure1.19isbasedonthecoefficient=2,herethevalueissetat1.Thisisbecausetheini tialpointissetatzero,notnegative,inthiscase.Theelasticityofresourcerecoveryagainstcostisco nsideredlowerforthiscasethanthatofFigure1.19.

Box1.10illustratesthegameformatforthescenario2 Boxesfrom1.11to 1.13 representthecaseswiththesameconceptasillustratedintheprevious boxesfrom 1.3to1.5 Box1.14illustratestheformatforthescenario3 Boxesfrom1.15to 1.17 representthecaseswiththesameconceptasillustratedinthe previousboxesform1.3to1.5.

(million$) e=Costofenforcementbypenalty(eisappliedfornon- contributors)a =Costofenforcementbyselfarrangedarbitrator

Case1:Gv=Gvc=Gvp, a>0,e=0(emayturn>0whengamefails)

Case2:Gv=Gvc, Gvp=0, a>0,e=0(emayturn>0whengamefails)

Case3:Gv=Gvc, Gvp=Gv/2, a>0,e=0(emayturn>0whengamefails)

Gameresult:In-between,becauseColumnIPv=ColumnIVPv.

Pv=TotalValueforProducersCpContributionbyConsumersPp=Co ntributionbyProducers

Gvc=GlobalValuePerceivedbyConsumersGvpGlobalValuePerceivedbyProducers e=Costofenforcementbypenalty(eisappliedfornon- contributors)a =Costofenforcementbyselfarrangedarbitrator

Similarly,Box1.18showsthegameformatforscenario2bthatrepresentstheideacont ainedinBox1.6whereconsumers'contributionsaredirectlydisbursedtoproducers.Boxesfro m1.19to1.21,hereagain,representthecaseswiththesameconceptsasillustratedintheboxesfr om1.3to1.5.

Further,Box1.22showsthegameformatforscenario3bthatrepresentstheideacontai nedinBox1.6,andBoxesfrom1.23to1.25representthecaseswiththesameconceptsillustrated intheboxesfrom1.3to1.5.

Gv=Cp+Pp)&(Pv=GvPp+Cp)

Cpr=ConsumersPaymentRatio/Ppr=ProducersPaymentRatio e=Costofenforcementbypenalty(eisappliedfornon- contributors)a =Costofenforcementbyselfarrangedarbitrator

Pv=0(Gv)-750(Pp)+750(Cp)=0II:

+1500(Cp)00III:Gv=0(Cp)+1500(Pp)00

Scenario3b(Gv=Cp+Pp1500)&(Pv=GvPp+Cp)

Variousgamesplayedaboveclearlyindicatedthatthebetterresultswouldbeachieved whenbothproducingandconsumingmembercountriesacceptthesimilarvaluesintheenviron mentalvaluesoftheenvironmentalresources.Thiscanbeachievedbypatientandfrequentcons ultationofpoliciesandexchangesofinformationbetweenproducersandconsumersunderthef rameworkofeachinternationalorganization.Betterappreciationofvaluesclaimedbyeachoth erwouldleadgamestoa success.Particularly,theemphasisshouldbeontheexistenceoffactor“ e”(enforcementofpenalties)and“a”(arbitrationsystem)Thesetwofactorsareproventobever yeffectiveunderthegameswhichimpliedthattheexchangeofinformationandpolicydialogue togetherwiththeself-established arbitrationsystemwouldleadtoasuccessfulconclusionofnegotiationswithintheactualintern ationalorganizations.Italsoimpliesthataproperlevelofpenaltiesleadtheorganizationscontri butionmanagementtoaneffectivelevel.Variousgamesplayedinthisthesisalsoillustratedthati tispossibletoreachcompromisingequilibriumbetweenconsumingandproducingmembers,a lthoughtheybecamepossibleonlyundercertainconditionsappliedforthegames.Thegamesal soillustratedthattransferoffundsfromconsumerstoproducerscouldcausefavorableeffects, whichshouldconstituteanimportantfactorintheframeworkofthisentirethesis.

5 Ifconsumerscontributetheentirefundandtransferittotheproducers,thegamesbec omeallsuccessfuloratleastnegotiable.However,thisisnota realisticsolutionbecauserespons ibilitiesneedtobesharedbythebothsidesundernormalcircumstances.

6 Whenthepenaltyischargedagainstfree- ridersandtheamountofthepenaltyislargeenoughtomakethe'non- contribute'solutionastheworstofallthechoices,thegamesallbecomesuccessful.This,howev er,maynotbecomeworkablewithouttheproperarbitrationsystemembeddedintherelatedinte rnationalagreements.

Basedonthesummaryofthegamesstatedabove,itmaybepossibletostatethatthebest recommendationforthesakeofconservationofenvironmentalresourcesisthatconsumersbea rallthecontributiontothefundandthatthefundbetransferredtoproducingcountriesasthecom pensationforforgoingeconomicbenefitstobeobtainedfromtheexploitationofthenaturalreso urces.However,thissolutionisnotrealisticbecauseitwouldnotbeacceptedbytheconsumerse asily.Ifthefundistobeusedasthecompensationoftheexploitation,theamounttobeclaimedb y theproducingcountries wouldbeunattractivelyhighfortheconsumers.Further,thereshouldbethegeneralunderstandi ngthattheresponsibilitiesneedtobesharedbythebothsides.Thus,thecompensationmeasurei snotnecessarilyastablesolutionthoughitisasuresolutionforthesakeoftheconservationofthe environmentalresources.

Likewise,thesolutionunderwhichproducersbareallresponsibilitiesisnotrealistic,b ecausetheproducersarenotwillinginthefirstplacetoforgotheirrights,andalso,mostobviousl y,theydonothaveenoughfundstoconducttheconservationmeasuresbythemselves.Theydo needproperassistancefromconsumingmembercountries.

Anotherpossiblerecommendationisthatconsumersprovidetheentirefundbutthefu ndbeuseddirectlytotheconservationmeasuresfortheenvironmentalresources.Inthiscase,ho wever,thefundmaynotsucceedifproducingmembercountriesdonotrecognizeanyvaluesint heenvironmentalassets.

Ifproducersrecognizeatleasthalfasmuchenvironmentalvalueasconsumingcountri esdo,theFundmaybecomesuccessfulbecauseproducersevenattheworstcaseseenodifferenc ebetweencontributionandnon-contributionsolutionsundertheconditionofnon- transfer.Iftheproducers sharethesamevalueastheconsumers,theFundcanbeconsideredtosucceed.

Anotherimportantfactorforthefundtosucceedistheintroductionofpenaltyarticlesi nitsimplementationrulesandregulations.Bythesuccessfulintroductionof penaltyclauses,theFundwouldsucceedregardlessthedegreeofproducers'recognitioninthee nvironmentalvalues.However,itmaynotbeeasytoreachconsensusbetweenthebothsidesinc reatingeffectivepenaltyclausesinthefirstplace.

Forthisreason,andalsoforthesakeofequalizingthevaluesforthebothsides,frequent andpatientconsultationsandinformationexchangesarerecommended.Ifandwhenthebothsi dessharethesameinformationandappreciateeachother'spositions,theywouldbeabletorecog nizethesameenvironmentalvalues.Thenthefundcansucceedevenwithoutthepenaltyclauses

Bysummarizingtheabove,itmaybepossibletosaythatthemostreliablerecommenda tionsisthecombinationoftheintroductionofpenaltymeasuresandthenon- transferoffundsasameansofcompensation.However,penaltymeasuresmaynotbeagreedift hebothsidesdonotacceptthesameenvironmentalvalue.Inotherwords,theFundbecomesmor esuccessfulandstablewhenthebothproducersandconsumersidentifythesameenvironmenta lvalues.

Hence,themost importantrecommendationisthattheboth sidesrecognizethesamevalues.Itisrecommendedthatinternationalorganizationsshouldhold properconsultationsbetweentheproducingandconsumingmembercountriessothattheboth groupsidentifythesameenvironmentalvalue.

Last but notleast,itshouldbementionedthatproducerscanmaketheirportionofcontributiontothefund asnon- cashcontributionsuchasintroductionofinternallawsandthetightercontrolmeasuresforexpor tandconsumptionoftheirdomesticresources.Thesenon- cashcontributionswilldecreasetheireconomicbenefitsthatcouldhavebeenaccruedfromtheu tilizationoftheresources;therefore,thesemeasurescanbeconsideredasequivalenttocashcont ributiontothefund.

JefferySchottstatedinhisbook“WTO,afterSeattle”publishedin2001,thatWTOneg otiationsbecameparalyzedatits3rdMinisterialMeetingheldinSeattlein1999.Thenegotiatio ntolaunchanewroundwasthwartedmainlybecauseNGOsaroundtheworldobjectedtheglob alizationoftrade.TheseNGOsaremostlyenvironmentalgroupssuchasGreenPeaceandWW Fwhobelievedthattradeintegrationharmtheglobalenvironment.Thisbookbya well- knowscholarfromInstituteofInternationalEconomicsoftheUnitedStatesillustrateshowthe WTOnegotiationsareaffectedbyenvironmentalconservationmovements.

During1990s,therehasbeena majorchangeintradedebateintheworld.Thisthesisfirs t examineswhat happenedtotraderelations duringthelastdecadeofthe20thcenturyandhowitinfluencedthetradedebatewithitsrelationst oenvironmentalconservation,particularlyintheUnitedStates,thelargesttraderintheworld.Si ncetheglobaltrendoftradedebatesalwaysoriginatesintheUnitedStates,reviewingthedebatei ntheUnitedStatesiscruciallyimportantforanycountriesintheworld,particularlytheWTOme mbers.

ThenthisthesisexaminestheenvironmentalissuesinVietnaminthecontextofinterna tionalrelations,particularlyitsrelationswithinternationalaid,andhowthechangeinthetraded ebatestatedabovemayaffectVietnamasVietnamhasbecomeamemberofWTOonJanuary11,2007.

SincetheenactmentoftheReciprocalTradeAgreementsActof1934,UStradepolicy hascenteredonopeninguptheglobaleconomythroughreciprocalreductionsinnationaltrader estrictions.Tradeliberalizationalwaystookthesimilarpattern,i.e.,thegovernmentnegotiatedt radeagreementwithforeigncountriesandopeneditsmarket,importspouredintotheUnitedSta tes,somevulnerableindustriessuffereda lossofmarketshare,protectionismfollowed,movem enttowardfurtherrelaxationoftradebarrierswastroubled,andsomenewsocialmeasures,such asTAA,wereintroduced.Thus,forcesworkingforfreetraderemainedconstantlyonguardagai nstgroupsofdomesticindustriesthreatenedbyimports.

Thiscontinuedintothelastdecadeandstillcontinues.Duringeachofthepasttwodeca des,tradestatisticswereverysimilar.Merchandiseimportsrose81%between1982and1988,a ndrose79%between1991and1997 25However, thelandscapeoftradepoliticswasnotthesameata llin1990s.

Duringthe1990s,thepoliticaldynamicsofthetradedebatechangedinsignificantways Traditionalprotectionismbecameweak,exceptthatfromsteellobbies,buttradeliberalizationi sthreatenedfromanotherdirection frompoliticallyimportantconstituenciesalarmedovertheimpactofglobalization,particularly, laborandenvironmentalgroups.Humanrightsactivistsalsoparticipatedinthetrade debate.Forexample,theyinfluencedthepassageofChina-

During1990s,mostlybecauseoftheinceptionofnewandveryimportantmultilateralt radeorganization,WTO,tradewasrelatedtomanyissues.Notonly"Tradeand

Labor,""TradeandEnvironment,"and"TradeandHumanRights,"butalso"TradeandPublic Health,""TradeandTransparency,""TradeandCompetition,""TradeandIntellectualPropert y,""TradeandDevelopment,""TradeandTechnical

These"Tradeand "issuesfirstrosetoprominenceinthestruggleoverthenegotiation andapprovalofNAFTA.NAFTAdebateendedasa victoryfortheClintonadministrationwhic hsupportedthetradeliberalizationthroughregionalarrangement,butthestrugglebroughttoget herforthefirsttimeacoalitionofactivistorganizations.Owingtotheirstrongdemand,Clintona dministrationconcededtoenactthelaborandenvironmentalsideagreements.

Organizedlaborisnota newplayerinthetradepolicyprocess.NAFTA,however,galv anizedlaboroppositionagainstfreetrade.Laborgroupsdevelopedavisceralsenseoftradeasat hreat,particularlyatthegrassrootslevel.

Theymaintainthat"tradecostsjobs,""tradesuppresseswages,"and"tradeundercutslaborstan dards."

USITCassessedNAFTA'seffectsonemploymentin1996andconcludedthattheagre ement'simpactonlaborwasdifficulttodiscern,andonlymodestwherediscernible.Tradecritic sconcluded,however,thatNAFTAandglobalizationgenerallychangedthecompositionofe mploymentinAmerica,shiftingittowardlower- payingservicesindustries,thusdamagingtheUSlaborstandardandcausingasignificantnumb erofjoblosses.

Unlikeorganizedlabor,environmentalistsarenewplayerinthetradepolicydebate.Th ecommitmentofenvironmentalgroupstotradeissues,thoughgrowing,isnotasfirmasthatofla bor.Somegroupssupporttradeliberalizationassertingthatitwouldleadto theefficientprotectionofenvironment.Otherssimplydenouncedtradebecausetradewouldex pandglobalconsumptionanddamagenaturalresourcesandearth‟slifesupportingsystem.TheNAFTAdebateofearly1990sexposeddeeppoliticalandideologicaldivisionswithintheenvir onmentalmovementovertrade policy.

Theopponent‟sargumentsarenotlimitedtotheeconomicaspectoftheissue.Theyare alsoconcernedaboutnon- economicalaspect,suchasaestheticvalueofenvironmentalgoodsandethicalimplications.

Theystrengthenedtheiroppositiontofreetradeasa resultofseveralWTOrulingsagai nstenvironmentalprotectionmeasures,includingthoseforthetuna-dolphin,shrimp- turtle,andMMTcases.

ClintonadministrationsuccessfullylettheCongresspassNAFTAbyprovidinglabora ndenvironmentalsideagreements.However,moderateenvironmentalistswhosupportedNA FTAweredisillusionedbytheweakprovisionsandhardenedtheirposition.Businessgroupsals oweredisappointedbytheenactmentofsideagreements.ThispreventedClintonadministratio nfromgainingfast- trackauthorizationandfreetradedebateturnedintostalemate.Americantradepolicymakingsy stemfacedanewandseriouschallengeof"tradeand "issues.

Laborandenvironmentalactivistscontinuedtoplaya significantroleinimportanttra dedebates.In1997,MAIwasabandoned.In1999,theeffortstolaunchtheWTOnewroundneg otiationinSeattlewasthwartedbythestrongdemandfortheinclusionoflaborandenvironment alnegotiationsaswellasstrongoppositionfromdevelopingcountriestothem.

In2000,theysucceeded,forthefirsttimeintheUShistory,toincludelaborandenviron mentalprovisionsinthemainbodyofaninternationalagreement Free

In2002,BushadministrationfinallygainedTPA,whichincludeslaborandenvironme ntalprovisions.Undertheconstrainsoftheseprovisions,USTRhasbeenengagedinvarioustra denegotiationssuchasDohaDevelopmentAgenda,FTAA,FTAswithChile,Singapore,Cent ralAmericanCountries,Morocco,SouthernAfricanCustomsUnion,AustraliaandEAIforAS EAN.

LaborwasdroppedfromDohaDevelopmentAgenda,andenvironmentwasonlyparti allyincluded.FTAAdidnotcompletelyruleoutthesetwoissuesbutitisexpectedthattheywillfa ceastrongoppositionfromdevelopingcountries.However,onethingcertainisthattheseissues willcontinuetobeincreasinglyfocusedandseriouslydiscussedinthefuturetradenegotiations. Republicanshavelearnedthattheywillnotbeabletoavoidtheseissues.

Someoftheenvironmentalnaturalresourcesarebeingprotectedbyinternationalagree ments.Particularly,someoftheenvironmentalprimaryproductsthatarealsousedasthesources ofcommercialproduction,suchasmarinecreaturesandtropicaltimbers,arebeingprotectedby commodityagreements.Primarycommoditymarketsaregenerallyconsidereddifferentfrom marketsforindustrialgoods.Commoditypricesareknowntofluctuatemuchmorethanpriceso findustrialproducts.Thisinstabilityhasbeenimposingproblemstobothproducersandconsum ers.

Primarycommoditiesareveryoftenthebackboneoftheeconomiesofdevelopingcou ntries.Hence,commodityagreementsareestablishedtosupportsuchdevelopingcountriesbyi ntroducingmultilateralmeasurestoguaranteereasonableincomefromcommoditytrade.Such measuresincludeproductionquotaallocationandbufferstocksystem.Perhaps,thesinglemost importantcharacteristicofcommodityagreementsisthefact that priceinterventionmechanismsareallowedasanexceptionoffreetradeunderGATTiftheyareo rganizedinaccordancewithcommodityagreements[GATT,XX(h)].However,astradelibera lizationexpandsunderGATTframework,mostcommodityagreementshaveabandonedthese priceinterventionmechanisms.Today,thecommodityagreementorganizationsarefunctioni ngmainlyasconsultationbodiesandinformationcenters.Theseroles,however,arestillveryim portant.

TheArticle20(b)accepts"trademeasuresundertakentoprotecthuman,animal,orpla ntlifeorhealth."

TheArticle20(g)accepts"trademeasuresnecessarytotheconservationofexhaustibl enaturalresourcesifsuchmeasuresaremadeeffectiveinconjunctionwithrestrictionsondome sticproductionorconsumption."

Thus,internationalcommodityagreementscancontroltradeflowofnaturalresources againsttheforcesoffreemarkets.Ifaninternationalcommodityorganizationdecidestochange thepricelevelofitsproductagainstmarketforceswiththeaimofnaturalresourceconservation,i tcanbedonewithoutbreachingGATTprinciples.Thisisindeedagreatadvantageofcommodit yagreementsinconductingnaturalresourcemanagement.

Table2.1.showsthatthelargeportionofthe10corecommoditiesoftheIntegratedPro grammeforCommodities(IPC)stillcomesfromthedevelopingcountries.For24IPCprimary commoditieslistedintheTable2.1.,theDevelopingCountries'exportsharehasremainedabou tthesameovertheprevious20years,whiletotaloutputincreased.Therealvolumeofcommodit ytradehasgrownby91%between1975andthemid1990's.Thisdemonstratesthatprimarycom moditiesstillplayanimportantroleintheworldeconomyoftoday.

Manydevelopingcountriesarestillheavilydependentoncommodityproductionandt rade.Problemsofcommodityproductionandtradestillremainofgreatimportancefordevelopi ngcountries.Developingcountrieshavebeensufferingfromthenegativetrendincommodityp ricesforthelastthreedecades.Commoditydependentcountries,therefore,gainsmallerprofits fromtheworldtradewhichispromotedthroughglobaltradeliberalization.Tropicaltimbersare notexceptionfromthisadversetrendincommodityprices.

WTOistheonlyinternationalorganizationequippedwithadisputesettlementmechan ism.TheestablishmentoftheDisputeSettlementBoard(DSB)isprobablythemostimportanta spectoftheentireWTOsystem.Forotherinternationalorganizations,includingtheUnitedNati ons,reachingagreementorconsensusbynegotiationsistheonlypossiblewayformemberstose ttledisputes.UnderWTODSBsystem,membercountrieshavetoabidebythedecisionsofthe DSB,bygivinguptheirownpositionassovereigncountries.Thisisindeedaremarkableachiev ementb y thefoundersofWTO.

Itdoes.However,WTOisnotabletointerveneallkindsofenvironmentalissues.WTOcanmak edecisionsifandwhenthecasesbroughtuptotheDSBareinaccordancewiththeWTOrulesrela tedtotradeandenvironment.Still,thefactthatWTOistheonlyinternationalorganizationinthe presentworldthatcanmakedecisionstoprotectenvironmentoverthesovereigntyof

DolphincasesbetweentheUnitedStatesandMexicoarewellknowtothegeneralpublicbutthe rulingbytheWTODSBwasagainsttheenvironmentalprotectionmeasuresintroducedbythe UnitedStates.TheWTOShrimp-Turtledisputeisarguablythemostimportantenvironment- relatedcaseunderwhichtheenvironmentalprotectionmeasuresweresupportedagainsttrade. ThedisputefocusedonSection609oftheEndangeredSpeciesActoftheUnitedStatesenactedi n1989thatrequirestheUSgovernmenttocertifythatallshrimpimportedtothecountryarecaug htwithTEDs(turtleexcluderdevices)thatprotectseaturtlesfromincidentaldrowninginshrim ptrawlingnets.India,Pakistan,Malaysia,andThailandfiledacaseagainsttheSection609in19 97.OnApril6,1998,a disputesettlementpanelruledagainsttheshrimpembargo,andtheAppel lateBodylatersupportedthepaneldecisioninOctober1998.

TheUnitedStatesmadecertainchangestothewayitimplementsthelawinaccordance withtheWTOruling.However,inOctober2000,Malaysiaagainchallengedtheimplementati onbytheUnitedStates.InJune2001,a WTOpanelruledthatU.S.implementationwasconsiste ntwithitsWTOobligations,andtheAppellateBodylaterupheldthatposition.Thus,WTOisco nsideredacapableinternationalorganizationfromtheviewpointofenvironmentalprotection.

Sincethefirst EarthSummitwasheldin1992inBrazil, enormousefforts havebeenmadebytheglobalcommunitytoprotectenvironmentalnaturalresources.Thisthesi sexaminesthebasicrelationsbetweenconservationofenvironmentalnaturalresourcesandint ernationalagreements,particularlyfromtheviewpointofeconomic effectivenessandefficiencies.

The global concern for natural resource conservation is escalating due to the alarming rate of depletion caused by human activities Many precious environmental resources face the threat of total extinction in the near future, underscoring the urgency to preserve biodiversity, which is crucial for human benefits and irretrievable once lost Additionally, irregular climate patterns and catastrophic effects such as floods and droughts are being experienced worldwide, largely attributed to global warming and the loss of tropical forests that absorb CO2 Air quality is deteriorating, particularly in major cities suffering from severe pollution from industrial emissions, vehicle exhaust, and construction dust Freshwater sources, including rivers, ponds, and lakes, are also contaminated, posing health and environmental hazards to local communities Furthermore, both coastal and deep-sea ecosystems are under threat from human activities, endangering marine life such as whales It is evident that human survival is dependent on maintaining clean air and water.

Hence,itisfelturgentbytheglobalcommunitytoreduceorstopdepletionofenvironm entalnaturalresources.Manyseriousefforts arebeing takenbyanumberof individuals,governments,NGOsandinternationalorganizationstopreventfurtherdegradatio nofenvironmentalnaturalresourcesonthefields.

TheUnitedNationsConferenceonEnvironmentandDevelopment(UNCED)heldin RiodeJaneiro,Brazilin1992,knownasthe"EarthSummit,"markedthetwentiethanniversary oftheUnitedNationsConferenceontheHumanEnvironmentheldinStockholmin1972.ThisS tockholmConferencewastheheraldofinternationaleffortsindealingwithenvironmentalprob lems.Whenitwasconvened,theenvironmentalproblemswereanewglobalissue.

StockholmConferenceputtheenvironmentalissuesontheinternationalagendaforth efirsttimeandsetthebasisforinternationalcommunitytotakeactionsafterwards.Stockholmc onferencealsoestablishedtheUnitedNationsEnvironmentalProgramme(UNEP),whichisth eprimaryinternationalbodythataddressesglobalenvironmentalproblems.

AfterthesuccessofStockholmconference,someimprovementshavebeenobservedi nreducingpollutioninindustrializedcountries,buta newtypeofenvironmentalproblemseme rged.Theyaretheradicalalterationstoentireplanetarysystems,suchasdepletionoftheozonela yer,andglobalclimatechange.Theworldhasbecomeawareofthecross- sectorialrelationshipsbetweentheenvironmentandtheeconomy.Theglobalcommunityhasa lsobecomeawarethattheinequitiesbetweenNorthandSoutharethemostimportanthurdlethat internationalnegotiationshavetoovercome.

ThedecisiontoconvenetheUNCEDreflectedthesechanges.TheWorldCommissio nonEnvironmentandDevelopment(WCED)issuedin1987alsomadeanimportantinfluencet oconveneUNCED.Thisso-calledBrundtlandreportdeveloped andintroduceda newveryimportantconceptonenvironmentalconservation,i.e.,sustainable development[Volger,p.16].

Thebalancebetweenenvironmentanddevelopment,thecoreconceptofsustainabled evelopment,hasbecomeapointofcontention.Thereconciliationbetweenthesetwoisnoteasy becauseindustrializedcountrieswantedallcountriestotakeactionstoprotecttheglobalenviro nmentwhilethedevelopingcountriesinterpretedthisunreasonablebecauseforthemitwaslike thosewhohaddamagedglobalenvironmentwereaskingthenew- comerstopayforthedamage.Further,paymentsforsuchpurposesarebasicallyintheinterestof industrializedcountries.

Basedontheabovebackground,theUnitedNationsGeneralAssemblycalledforaglo balmeetingin1989thatwouldaddresstheeffectsofenvironmentaldegradationandinternation aleffortstopromotesustainableandenvironmentallysounddevelopmentinallcountries.This eventuallyledtoUNCEDheldin1992inRiodeJaneiro,Brazil.Theconferencewasattendedby morethan35,000people,including106headsofstate.A numberofNGOsand9,000journalists attendedthemeetingsandothereventssurroundingtheConference.

ThefundamentalthemeoftheRioEarthSummitwasthereconciliationbetweenecon omicdevelopmentandenvironmentalconservation.TheseideasareembodiedintheRioDecla rationonEnvironmentandDevelopment(theRioDeclaration),andAgenda21.Thesetwodoc umentsarecalledtheRioAccordsasasetwhichwereadoptedby154participatingcountriesat UNCED.TheRioAccordsfocusedonpoliciestomaketradeandenvironmentmutuallysuppor tive,provideadequatefinancialresources,andencouragemacro- economicpoliciesconducivetoenvironmentanddevelopment.

ByreadingtheRioAccord,itisrealizedthatthedocumentsaredesignedasthebasisfor comprehensivedevelopmentprogramstobeimplementedforthefutureoftheglobalcommuni tyineveryareawhereeconomicactivityaffectstheenvironment.TheRioAccordsencourages ustainabledevelopmentpoliciesthatmeetthegrowing needsinthedevelopingcountries.

OnSeptember3,2002,thesecondworldsummitonenvironmentalissueswasheldinJoh annesburg,SouthAfrica.TheWorldSummitonSustainableDevelopmentwasheldintheface ofgrowingpovertyandincreasingenvironmentaldegradation.TheWorldSummithassuccee dedingeneratingasenseofurgency,commitmentsforaction,andpartnershipstoachievemeas urableresults[Speechb y Secretary-GeneralNitinDesai].

AsaresultoftheSummit,thePlanofImplementation,aimedatdetailingtheactionsneed edtofightpovertyandprotecttheenvironmentwasadopted.Participantgovernmentsagreedo naseriesofcommitmentsinpriorityareasthatwerebackedupb y specificgovernmentannoun cementsonprogrammes,andbypartnershipinitiatives.Morethan220partnerships,representi ng$235millioninresources,wereidentifiedduringtheSummitprocesstocomplementthegov ernmentcommitments[UNreport,p.48].

Forexample,forwaterandsanitation,countriesagreedtocommitthemselvestohalveth eproportionofpeoplewholackcleanwaterandpropersanitationby2015.Inenergy,governme ntscommittedthemselvestoexpandingaccesstothetwobillionpeoplethatdonothaveaccesst omodernenergyservices.Onhealthissues,inadditiontoactionstofightHIV/

AIDSandreducewaterbornediseases,andthehealthrisks duetopollution,countriesagreedtophaseout,by2020,theuseandproductionofchemicalsthat harmhumanhealthandtheenvironment[UNreport,p.58].

Thereweremanycommitmentsmadetoprotectbiodiversityandimproveecosystemma nagement.Theseincludecommitmentstoreducebiodiversitylossby2010;torestorefisheriest otheirmaximumsustainableyieldsby2015;toestablisharepresentativenetworkofmarinepro tectedareasby2012;andtoimprovedevelopingcountries'accesstoenvironmentally- soundalternativestoozonedepletingchemicalsby

$100millioninadditionalresources,andaUSannouncementof$53millionforforestmanage mentin2002-2005[AsahiNews,p.23].

Thus,WSSDendorsedandreinforcedthecommitmentsagreedatUNCEDandfurthe rintroducedanumberofconcreteactionstorealizethegoalsetbytheglobalcommunity.Theac tualeffects,however,remaintobeseenandverified.

Thereisanotherveryimportantimplicationtotheenvironmentalissuesindeveloping countriesincludingVietnam.Itistherelationbetweeninternationalaidandthelocalnaturalenv ironment.ThissectionfirstexaminestheeffectofODAtotheenvironmentalconservationinde velopingcountries.

ODA issues are closely linked to trade matters, particularly in the context of the WTO's ongoing negotiations, where "Implementation" has emerged as a crucial and complex topic With 146 member countries, the majority being developing nations, these countries are entitled to favorable treatment under the special and differential provisions in various WTO agreements Consequently, developing nations have collectively advocated for greater privileges, insisting that "Implementation" issues must be resolved before any agreements are reached among industrialized countries This demand for addressing "Implementation" effectively translates into requests for ODA support from developed nations to assist in the trade sector, often manifested through technical cooperation initiatives like training programs and the deployment of trade rule experts Additionally, larger-scale grant projects, such as the establishment of trade training centers and even trade universities, are part of these requests As a result, there is a growing trend of extending ODA to the trade-related sectors of developing countries, exemplified by various technical cooperation projects in Vietnam.

WTOaccessionsupport,rangingfromtariffevaluationtrainingtothedraftingofcommercialre latedlaws.A projecttoestablishtechnicalassistancecentersforsupportingindustriesofVietna mhasalsobeensuggestedfromJICA.

Therehavebeena numberofdocumentscriticizinginternationaleconomiccooperati on,eitherbymultilateraldonorsorbilateraldonors.Twoofthemostconspicuouscriticisms,am ongmany others,seemtotheinefficiencyoftheaidandtheenvironmentaldestructioncausedbyinfrastruc tureconstructionprojects.

Oneofthehighlyreputedbookswhichdiscusstheissueofenvironmentaldestructioni s"MortgagingtheEarth"byBruceRich.This sectiondiscussestheissuesrelatedtoenvironmentaldestructioncausedb y internationalecon omiccooperationmainlybasedontheargumentspresentedinthebook

BruceRickrepeatedlystatesinhisbook,"MortgagingTheEarth,"thatprojectsconduc tedb y theWorldBankhaveoftenresultedinenvironmentaldestructionanddamagetothewelf areofthegeneralpublic.Rickarguesthat"theBankusesnationalsovereigntyasasmokescreenf orwithholdinginformationnotonlyfromthepublic,butfromitssovereignmembers,"andthatt heBank'sprojects"relinquishimportantpartsofnationalsovereignty oftentothedetriment oflong- termdomesticandenvironmentalneeds."HeintroducesanumberofprojectssuchasPolonoroe steRoadConstructionprojectinBrazil,andtheKhorChorKorForestReservePrograminThail and,asexamples.

Thereshouldbenodoubtthattheinternationaldonorsneedstoimprovetheirassistanc eprojectstomeettherealneedsoftherecipientcountries,andtothebenefitoflocalpeople,withd ueconsiderationtoenvironmentaleffects.However,theimprovementofthedonorpracticesal onemaynotguaranteeproperselection,andtheimplementationofprojects.Thereisantherimp ortantgroupofplayerswhoareresponsiblefortheimproperselectionandhazardousimplemen tationofinternationalprojects.Richdoesnotemphasizethispointinhisbook,but privatesectordevelopersandconsultantsareoftenmoreresponsibleinthedecisionmakingpro cessoftheprojects.

Recipient countries must accept projects from the World Bank and foreign aid programs, often selecting from their proposed request lists However, a significant issue is the lack of quality projects submitted by these countries, primarily due to several factors First, developing nations typically have disorganized administrative offices that struggle to identify their true economic needs and the potential effects of foreign aid Second, many governments in these countries are not democratically established, leading officials to favor projects that benefit them personally rather than the public Third, domestic issues, such as the protection of inefficient local industries, hinder the ability to request suitable projects Lastly, cultural, social, and political differences between recipient and donor nations can create conflicts in project selection.

Basedonthesefactorsasbackground,oneoftheproblemswhichshouldnotbeoverloo kedisprobablytheinterventionofforeigndevelopersandconsultantsinthedecisionmakingpr ocesswithintherecipientcountries,thoughoftenitisnotopenlyperceived.

Economiccooperationmovesalargeamountofmoney,andthemoneyendsupintheh andsofprivatecompaniesfromindustrialcountrieswhichactuallyconducttheconstructionwo rksindevelopingcountries.Aidprojectsareveryprofitableforthesecompanies.Thenatureoft heseprofit-orientedfirmsisthattheydowhatevertheycaninordertowinthetender.

Sincetheprivatesectorplaysa verysignificantroleinthedecisionmakingprocessofe conomiccooperationprojectbehindthescene,theiractionsneedtobeproperlyregulatedforthe implementationoftrulyeffectiveandbeneficial developmentprojects.However,asnotedintheabovesections,itisoftenverydifficulttoidentif ysuchactivitiesofprivatefirmsbecausetheymaysidewithrecipientgovernments.Theymayb esecretlybehindthecurtainofsovereignty.Eventhoughthedonornationsestablishedproperru lesfortendersandotherprocedures,noforeigncountrycaneffectivelyenforcethemwithoutful lcooperationofrecipientcountries.Nevertheless,withoutpropereffectivemeasurestoregulat etheinfluenceofprivatesector,itwillremaindifficultfordonorstoselectworthyprojects.

Italsoshouldbenotedthatthereisnothingwrongwithprivatesectordevelopersandco nsultantsprovidingadvicestorecipientcountries.Actually,asalreadystatedabove,theseadvic esareoftenindispensableforidentifyinggoodproperprojectsintherecipientcountries.Weonl yhavetobealertthatthesefirmsareexertingeveryeffort,thattheyareself- interested,andprobablymuchclevererthanthegovernmentofficials, sinceforthemitisamatterofcommercialsurvival,andtherearemillionsofdollarsatstake.

Thebestanswerthatcanbegiventothesaidproblemisprobablytheincrease oftransparency.Actually,thisisthetrendnowadaysinalmostallinternationalorganizations.Fo rexample,theDohaMinisterialDeclaration,whichlaunchedthenewroundofWTOnegotiatio nsincludedthe"transparencyingovernmentprocurement"asoneitemonthemainagendaofth eround.

TheBankandallindividualgovernments'aidagenciesshouldmaketheentiredecision makingprocessopennotonlytotheauditorsbutalsotothegeneralpublic.Theyalsoshouldcon ductpublichearingsateveryprocessoftheprojectselection.Inthisway,thedonorscanpreventc riticismoftheselectionprocess.

Theyalsoshouldmakeita conditionfora recipientcountrytomakealldecision- makingprocessesopentothepublic,andconductpublichearingsif theywishtoreceiveeconomiccooperation.Sincenoforeigncountrycanimplementsuchproce duresovertheadministrativeofficialsoftherecipientnations,thecredibilityofsuchprocedures cannotbeperfectlyguaranteed.Nevertheless,theincreaseintransparencywillenormouslyen hancetheeffectivenessandcredibilityofsuchaprojecttotherealbenefitofthegeneralpublican denvironmentalconservation.

Thesovereigntyofrecipientcountriesisanunavoidablelimitinwhichdonorsmustco nductresearchandimplementprojects.Asstateda fewtimesbefore,nocountrycanforceasove reigncountrytoacceptaprojectwhichtheydonotwish.

Also,weneedtorealizethattheeconomicforcessurroundinga projectareverystrong, and itwouldbealmostimpossibletoeliminateallprofit- orientedinterestsofprivatesectorandthegeneralpublicinchoosingaproject.Inotherwords,a worthyprojectmaynotbeselectedevenifthegovernmentsofbothdoneeanddonorcountriesac twithoutanyfaults.

Inordertoaddresstheseissues,thedonornationsshouldprovidetechnicalcooperation torecipientgovernmentstoenhanceadministrativecapacity.Suchcapacitybuildingcooperati onshouldincludetheintroductionofdemocraticadministrativesystems,theenactmentofprop erlegislationwithregardtocontrollingtheethicsofgovernmentofficials,enactmentofproperc ommerciallawstorestricttheinfluenceofactivitiesofprivatefirms.Propereducationshouldals obenecessary.Lawsandregulationscannotbeproperlyenforcedwithouttheproperknowledg eofofficials,corporateexecutives,andalsothegeneralpublic.Developingcountriesareobviou slylackingthesesystemsandeducation.

Aninternationaltreatytoregulateeconomicforcessurroundingaidprojectsmayalso beaneffectivetool.Ifpropercostsareembeddedinalltendersunderaninternationaltreaty,fore xample,ifitobligatestenderwinnerstoconductsubsequentevaluationtoensurethewelfareoft helocalpeople,environmentalprotectionwouldbeeffectivelysetinamechanism.Thetreatysh ouldalsoobligateallcontractingnationsthatabreachofsuchconditionsacriminaloffenseagai nsttheirprivatesectordevelopers.Ifsuchatreatyisagreedto, alldevelopershavetoincludethesefactorsasa necessarycostoftheirprojects.Then,theywillst rivetoprovideprojectswhichareprofitablenotonlytothem,butalsobeneficialtothegeneralpu blic,andtheenvironmentatthesametime.

Environmentalsustainabilityisessentialforthehumanstosurvive,whileeconomicd evelopmentisdesperatelyneededforalargenumberofpeopleontheearth.In1989,UnitedNati onsreleaseda reportbyBrundtlandthatasserted“afivefoldtotenfoldincreaseineconomicacti vitywouldberequiredoverthenext50yearstoachievesustainability”[Goodland,1992,p.16].

However,Goodlandpointedoutthat“itseemsunlikelythattheworldcan sustaina doublingoftheeconomy,letaloneBrundtland'sfive-toten- foldincrease”[Goodland,1992,p.16],statingthatvariousglobalenvironmentalcapacities,suc hasfoodproduction,CO2sinkinforests,biodiversityandsoon,couldhavealreadyreachedthei rlimits.

Meanwhile,UNCEDplaced'sustainabledevelopment'asthemainconceptrequiredf ortheglobalcommunitytosurviveintothenextmillennium.

Hence,ithasbecomequiteimportanttoknowthedefinitionofthe'sustainabledevelop ment'whichcansatisfybothsurvivalanddevelopmentofthehumansatthesametime.RobertG oodlandarguedonthismatterindetailinhis1997article'BiophysicalandObjectiveEnvironme ntalSustainability.'Goodlandstateda fewdefinitionsofsustainabledevelopment.Thefirstdef initionwasgiveninthe1989Brundtlandreport:'Developmentthatseekstomeettheneedsanda spirationsofthepresentwithoutcompromisingtheabilitytomeetthoseofthefuture.'WWFintr oducedanewdefinitionin1993:'Improvementinthequalityofhumanlifewithinthecarryingc apacityofsupportingecosystem.'Goodlandhimselfstatedanotherdefinition:“Development withoutthroughputgrowthbeyondenvironmentalcarryingcapacityofsupportingecosystem

ThemostimportantargumentGoodlandprovidedisthatcurrentlylowincomecountri estobecomeasrichastheNorthis“notpossible”[Goodland,1997,p.68].Therefore,inorderfor environmentalqualitytobecomesustainable,developmentofpoorcountriesmayhavetostayi nthelowlevel.Encouragingly,however,Goodlandfurtherarguethatincomelevelof$1500to$ 2000ispossibleandthelevelcanprovide80%ofthebasicwelfareprovidedbya$20000income [Goodland,1997,p.68].

Worldpopulationhas beenincreasingatarapidrate, growingfromaround800millioninthelate18thcenturyto1.6billionat thebeginningofthe20thcenturyto5.6 billiontoday.Konostatesthattherearesomeforecastspredictingthattheworld'spopulationma ybecomedoubledin50years,thoughtheincreaserateseemstohavesloweddownalittleinrece ntyears[Kono,p.685].TherecentUNreportstatedthattheworldpopulationhasalready surpassed6billionanditmaybecome9billioninthemidofthenextcentury[Yomiuri,p.23].

Sakaiintroducedhisviewthatindustrializationhascausedenvironmentalpollutiona nddestructionofthenaturalenvironmentinmanyregionsoftheworld.Variouskindsofserious industrialpollutionwererecordedsincethebeginningoftheIndustrialRevolutioninthemid- 1800s,andhavebeenwitnessedmorefrequentlyasindustrializationadvancesworld- wide[Sakai,p.38].

BarryFieldalsosummarizestotheeffectthatglobalenvironmentalproblemssuchasg lobalwarming,thedepletionoftheozonelayer,andthedestructionofecosystemsduetotheloss ofbiologicaldiversityhavebecomeincreasinglyobvious.Amonganumberofreasons,human economicactivities,especiallytheexpansionandglobalizationofindustriesandtheviciouscir cleofpopulationgrowthandpovertyinthedeveloping nations areconsideredtobethemostseriouscauses.Theoriginofthecurrentenvironmentalproblemsli esfundamentallyintheexpansionofeconomicactivitiesofboththeexcessiveconsumptionofr esourcesandtheemissionofwastebeyondtheenvironment'scapacitytoassimilate[Field,p.35 ].

Needlesstosay,thenaturalenvironmentisessentialforhumanlife.Besidessupplying thelifebloodofexistencesuchasair,water,andfood,theenvironmentalsogivesusresources,a bsorbsandassimilateswaste,andprovidesamenities.

AccordingtoVolger,themajorglobalenvironmentalgoodsaffectedbypollution,suc hastheairandtheoceans,arecalledglobalcommons[Volger,p.6].

Globalcommonsaresharedbyallthepeopleoftheworld,andthesepreciousassetsarei rreplaceable.Therefore,itisimperativetoapplycountermeasuresagainstglobalenvironmenta ldegradationsuchasglobalwarmingandthelossofbiodiversity.Otherwise,futuregenerations willhavetofacecatastrophicconsequencesfromthe environmentaldegradationnowbeingcausedbycurrenteconomicactivities.

However,itshouldbenotedthattheseproblemscannotbesolvedsimplybytheaction ofasinglenation.Internationalcoordinationisimperative.Inthisregard,theissueofequitybetw eenthenationsoftheindustrializedcountriesandthedevelopingcountriesmustalsobeconside red.Itshouldnotbeamistaketosaythattheindustrializednationsarelargelyresponsibleforenv ironmentaldamageoftoday,andthatdevelopmentandeconomicgrowthremainthemostimpo rtantobjectivesforthedevelopingnations,whiletheireconomicgrowthwillcausefuturedegra dationofenvironmentalassets,includingdepletionoftropicalforests.

Basedontheseperceptions,theideaofsustainabledevelopmenthasnowbecomeacce ptedasa keyconceptinaddressingglobalenvironmentalissues.Asindicatedabove,therearesti llargumentsaboutdefinitionofsustainabledevelopmentbut itgenerallymeansutilizingallkindsofstocksoftheworld'swealth,includingboththeenvironm entandhuman resources,insuchawaythattheirfruitscanbeenjoyedbythepresentgenerationandbepassedov ertofuturegenerationsinaconditionthatisequivalenttoorbetterthanitscurrentcondition.How ever,conservationmeasurestoachievethesegoalshavenotbeenagreedbytheinternationalco mmunitybecauseoftheeconomicimbalanceandenvironmentalperceptiongapbetweentheN orthandtheSouth.

Unfortunately,theabovementionedglobalvaluesarenotoftencompatiblewithvalue sforruralpopulationofdevelopingcountries.Nebeletalarguethat“deforestationcause com e(s) downtothefactthatthecountriesinvolvedareinneedofgreater economicdevelopmentandhave rapidpopulationgrowth”[Nebeletal,p.484].Themostimportantvaluethatagro- culturalfields,livestockproductionareasorforestsprovideforthemostoftheruralpopulation;t herefore,isconsidereditseconomicuse.Thecropsharvestedfromagriculturegenerallyprodu cemuchmore cashearningstothelocalpeopleinthedevelopingcountries.Further,theagriculturallandscanb econvertedintohabitualorcommercialareaswhichwouldprovidemoreeconomicbenefitstot helocalpeople.Therefore,aslongasthevalueoftransformationofareaswhichprovideenviron mentalvaluesintotoagricultural,habitualandcommerciallandishigherthantheabovementio nedotherglobaleconomicvalues,environmentalnaturalresourcesdepletionmaynotbestopp ed.

Thus,inordertoachievesustainabledevelopmentandnaturalresourcesconservation, thiseconomicincentiveinthedeveloping countrieshastobeaverted.Itshouldbenotedthatmarketmechanismsmaynotbeabletoinduce desirableoutcomeinthisregard.AsFieldargues,fromtheviewpointofeconomictheories,envi ronmentalproblemsarerootedintheexistenceofeconomicexternalities(externalcosts)[Field,p.70].Uptonow,theenvironmenthasbeentreatedasafreeresource,andtheexpenditure srequiredforenvironmentalconservationhavenotbeenincludedinthecostsandpricesofecon omictransactions.Inotherwords,theenvironmenthasnotbeenrecognizedasaninputfactorine conomicdecisions.A solutiontoenvironmentalproblemsliesinincorporatingenvironmental conservationintoeconomiccalculations.

Themostdistinctivecharacteristicofinternationalenvironmentalproblemsisthelack ofeffectiveenforcementinstitutions.Wheneachandallcountriesintheworldhavesovereignty intheirdecisionforenvironmentalconservationorpollutiondischarge,itisverydifficultforthe globalcommunitytoenforceenvironmentalconservationactionsagainstcountriesthatdonots upportthem.

Undersuchcircumstances,effortsbytheglobalcommunityonenvironmentalconser vationarelikelytofail.Thisisoftenexplainedwiththeapplicationof'gametheory'.BarryFielda rguesthat,whentwocountriesarenegotiatingthelevelofindustrialemissions,“ althoughboth countrieswouldbebetteroffiftheybothreducedemissions,comparedtobothemittingatthehig hlevel,eachshouldbestillbetteroffiftheycouldbeinasituationwheretheothercountrycontrol semissionswhiletheydonot witheachcountrytryingtofreerideontheother'scontroleffort s,neithercountrywillendupreducingemissions,soweendup witheverybodyworseoff”[Fi eld,p.459].

Then,Fieldconcludesthat“themainjobofany environmentalagreementistogetcountriestoagreetoreducetheiremissionsandtoresistthete mptationtotryandgarnerevenlargernetbenefitsbyfreeridingonthecontroleffortsofothers”[ Field,p.459].

Ostromarguesthat“ifanexternalauthorityaccuratelydeterminesthecapacityofaco mmon- poolresources,unambiguouslyassignsthiscapacity,monitorsactions,andunfailinglysanctio nsnoncompliance,thena centralizedagencycantransformthe gametogenerateanoptimall yefficientequilibrium”[Ostrom,p.10].Shefurtherdiscussesthata gameinwhich“(thegamep layers)themselvescanmakea bidingcontracttocommitthemselvestoacooperativestrategythattheythemselveswillworko ut”wouldleadthegameplayersto“shareequallythesustainableyieldlevels”[Ostrom,p15].

The'external authority'herebymentionedcanbeinterpretedasaninternationalorganizationandthe'binding contract'asaninternationalagreement.Therefore,thisOstrom'sviewsuggeststhataninternatio nalagreementadoptedbyitsmembercountriescanprovideanefficientlevelofenvironmentalc onservationwithoutfallingintotheprisonersdilemma.

Internationalorganizationsareusuallysupportedbycontributionfromtheirrespectiv emembercountries.Generally,theaccountsofinternationalorganizationsareclassifiedintotw ocategories;i.e.,theadministrationaccountandtheprojectaccount.Theadministrativeaccoun tisforthebasicrequirementsoftheorganizationandgenerallyincludessuchbudgetlinesassala ries,rent,officeexpensesandsoon.Thisaccountisnormallysupportedbytheobligatorycontri butionwhichisoftenallocatedbyproratebasistoitsmembercountries.Theprojectaccountisfo roperationofvariousprojectstorealizetheobjectivesoftheorganization.Thisaccountisoftens upportedbythevoluntarycontributionfrommembercountries.

Asforenvironmentalorganizations,theGlobalEnvironmentalFacilities(GEF)provi desanexample.GEFwasestablishedamongtheWorldBank,UNEPandUNDPin1991topro moteglobalenvironmentalconservationactivities.Therefore,itsadministrationcostiscovere dbythesethreeorganizationsadministrativeaccountwhichisfundedb y UNmembercountrie sonproratebasis.ForprojectsunderUNDP/

GEF,640millionUSdollarsarereportedtohavebeencontributedtothisfundfrom1991to1998 asaformofvoluntarycontribution[UNDP,p.7].Thisamountwasdistributedtoseveralenviron mentalconservationareassuchasbiodiversity,climatechange,internationalwatersandozonel ayers.AlsothroughUNEP,750projectswith

TherelationbetweenVietnamandinternationalenvironmentalorganizationhasnotr eachedasignificantlevel.SincetheVietnameseexportofwoodproductsisincreasingveryrapi dly,itsrelationwiththeInternationalTropicalTimberOrganization(ITTO)willbecomeveryi mportanttoVietnam.Inthissection,theplightofforestconservationisexamined,whichleadst otheapplicationofeconomictheory(gametheory)intheChapter3.

Tropicalforestsprovidea verygoodexampleofeffortsbeingtakenb y theglobal communityfortheconservationofenvironmentalnaturalresources.This issueisalsocloselyrelatedtotheconservationofbiodiversity,globalwarminganddesertificati on.Sincetropicaltimbersaretradedintheworldmarket,therelationbetweenproductionandco nservationcanalsobeexaminedthroughtropicalforests.

TheInternationalcommunitywasalarmedbytherapiddepletionoftropicalforestsdu ring90s.Therefore,itisworthwhiletoreviewthetropicalforestssituationin90sforthesakeofve rifyingtheglobalconservationefforts.AccordingtoaFAOReport,theareaoftheworld'sforest s,includingnaturalforestsandplantations,isestimatedtohavebeen3,454millionhain1995,m orethanhalfofwhichwasindevelopingcountries.Theareaoftropicalforestsisestimated1,790 millionhain1995(Table2.1)whichcorrespondsto37percentofthetotaltropicallandarea.Ast heTable2.2indicates*,almostentirenetforestdepletionindevelopingcountriesisbeingobser vedintropicalforests.Therefore,theglobaldeforestationproblemwas,andstillis,virtuallythe problemoftropicalforestdepletion.

Changesinforestcoverinthetropicalforestsaremainlycausedbyexpansionofsubsist enceagricultureandlargeeconomicdevelopmentprogramsinvolving resettlementintimberproducingdevelopingcountries.Inotherwords,timberharvestingisnoti ngeneraladirectcauseofdeforestation.Constructionofroadsalsohasbeenafacilitatingfactori nsomeareasbecausetheymakepreviouslyremoteforestareasaccessibleforfarmerstocultivat e.Tobemorespecific,forestdegradationiscausedmainlybyexcessivecollectionoffuel- wood,overgrazing,fire,andpoorharvestingpractices.Internationaltradeinforestproductsacc ountsonlyfor6-8percentofworldtropicaltimberproduction[Barbieretal,p.20].

Table2.2:Totalforest area,relatedlandareaand population in1995 26

26FAO conductedtheseresearchesin1995andpublishedtheresultin1997initsannualreport.Thisisthe latestreportasof2008forthistypeofresearches.

2.2 indicates,therehasbeenacontinuedincreaseindemandforwoodproducts Table 2.3 indicatesthatglobalconsumptionofwoodmayincreaseby35percentbetween1990and2 010.

Manycountriesbecomemorerelyingonplantations(Table2.4).AstheTable2.2indic ates,theareaofplantationsindevelopingcountriesincreasedannuallyb y 4.1millionhaduring 1980-

AccordingtoFAO,astheTable2.6indicates,thetropicalzoneisclassifiedintothe followingsixzones:Tropicalrainforests,Moistdeciduousforests,Dryzone,Verydryzone,De sertzone,andHillandmountainforests.

Nearlythreequartersofthetropicalforestisinthetropicalrainforestandthemoistdeci duousforestzones.Drylowlandanduplandeachconstitutesabout12to13percentofthetotaltro picalzoneforest.

Table2.5furthershowsthat77percentofthelandareainthewetzonewasstillcoveredw ithnaturalforestin1995.Thecorrespondingpercentagesare46inthemoistdeciduous,19inthed ryandverydryand29inthehillandmountainforestzones.Originalstateofforestsisnoteasilyest imatedbuttheentirewetzone,themoistzoneandhillandmountainzoneaswellcanhavebeenco mpletelyforested.Hence,itcanbesaidthat33%ofwetzoneand71%ofhillandmountainzoneh avebeendeforestedsofarbythehumanactivities.

90period,theannualestimatedlossinnaturalforestareais12.1millionha.Thiscorrespondstod eforestationrateof0.8percent(Table2.5).

AstheTable2.6alsoshowsthatthelowestannualdeforestationrateisobservedinthew etzone.Deforestationratesaremuchhigherinthemoist,dryandhillandmountainzones.Thism aybebecausethesezoneshavemorefavorableconditionsforagricultureandhighpopulationpr essure.

Now,letusbrieflyseetheeffectsofdeforestationrateof0.8%.Although0.8%appears quitesmallasafigure,accumulatedeffectisenormous.Ifdeforestationcontinuedatthisrateof0 8%,in30yearsitwillbe27%andin50yearsitwillbe49%.Atthisrate,theworldwilllosenearly 50%oftropicalforestsinmerely50years.Iftherateincreasesonlyby0.2%to1%ayear,theeffec tis10.5%depletionin10years,34.5%in30years,and64.5%in50years.

Itshouldbenoted,however,theabovementionedeffectsarethosefornaturaltropicalf orestsonly.Iftheincreaserateofplantationiscounted,thenetdepletionratecanfallto0.6%ayea r,thoughthedamagetothetropicalforestsisstillseriousatthisrate.

27The datahereisrelativelyold,buttheperiodexperiencedarapiddepletionofforests,therebythese figuresrelativelyimportantforthestudyofforestdepletion.

Therefore,theseoldfiguresareintentionallychosenforthisthesis.Also,thesimilardatadonotappe arintherecentstatisticsofrelatedorganizations.

28As inthecaseforTable3.,thisisthelatestdatawhichcanillustratetheforestcoverchangesinthemann erarrangedintheFigure FAOhasnotupdatedthefiguresinitsrecentannualreports.

Astheglobalcommunityisincreasinglywitnessingextinctionoffaunaandfloraspeci es,therehasbeenagrowingrecognitionthatbiologicaldiversityisaglobalassetoftremendousv alueforpresentandfuturegenerations.Thethreattospeciesandecosystemshasneverbeensee medsogreatasitistoday.Speciesextinctioncausedb y humanactivitiesisoccurringatanalar mingrate.ItisstatedinthetextoftheConventiononBiologicalDiversitythat"Concerningthatb iologicaldiversityisbeingsignificantlyreducedbycertainhumanactivities."Thetextisalso"St ressingtheimportanceof,andtheneedtopromote,international,regionalandglobalcooperati onamongStatesandintergovernmentalorganizations."

Respondingtothisconcernoftheglobalcommunity,theUnitedNationsEnvironment Programme(UNEP)launchedaseriesofexpertmeetingsonbiologicaldiversityin1988toexpl oretheneedforaninternationalconventiononbiologicaldiversity.Finally,thetextoftheConve ntiononBiologicalDiversitywasadoptedinMay1992attheNairobiConference.TheConvent ionwasopenedforsignatureattheRioEarthSummit.Itreceived168signaturesintotal.TheCo nventionenteredintoforceon29December1993.

Biologicaldiversityismostcloselyrelatedwithtropicalforestsconservation.Thereis anestimatethattropicalforestscontainsalmosthalfoftheglobalfaunaandfloraspeciesexisting today,althoughtheareaisonlyonefifthofthetotallandintheworld.Tropicalforestsarediminis hingrapidlyandtherebycausingseriouseffectsonbiologicaldiversity[Stiling,p.259].Biodive rsityisaffectednotonlybythedecreaseinthesizeofhabitatsbutalsothedivisionmadeb y roads andotherhumanmadeobstacles.Therefore,thedegreeofthreattobiologicaldiversityismores eriousthantherateofforestdepletion.Thereisanestimatethatasmuchas150,000speciesarebe ingextinctannually.Ingeneral,atleast5,000speciesareconsideredtobebeingextincteveryyea r.Mostofthemarebeinglostevenwithoutbeingdetectedbyhumans[Goodland,1997,p.22].

Tropicalforestsconservationisviewedimportantalsoinrelationwithglobalwarming Theaverageglobaltemperaturebarelyincreasedmorethan0.5degreeCelsiussincetheturnoft hecenturyandthechangeisscientificallyproventohavebeencausedbytheso- calledgreenhouseeffect.CO2isidentifiedasthemajorgreenhousegas.Globalwarmingwillca useanumberofseriousnaturaldisasterssuchasfloods,droughtanddesertification.Themostse riousthreattothemankindcouldbethelossoflandtothesea.Theglobaltemperatureisexpected toincreaseby1to3.5degreeb y theyear2100andthentheleveloftheseasurfacewillinaverage be50cmhigherthantoday[Nebeletal,p.414].

The Intergovernmental Panel on Climate Change (IPCC) was established in 1988 and issued a report in 1995 recommending a 50% reduction in CO2 emissions International efforts, including the Framework Convention on Climate Change (FCCC) adopted in 1992, aim to limit CO2 emissions to 2000 levels observed in 1990 Forests play a crucial role in carbon dioxide management, acting as significant carbon sinks by absorbing CO2 from the atmosphere To effectively reduce carbon emissions, better protection and management of forests are essential, as they store CO2 in trees, vegetation, soils, and durable wood products Additionally, increasing plantation forests is vital, as they absorb substantial amounts of CO2.

Totalexportsofprimarytropicaltimberproductsbytheproducingcountrieswere$11. 5billionin1999,maintainingthesamelevelfrom1998.Ofthistotal,Asiaaccountedfor79%,Af ricafor14%andLatinAmericafor7% 29

Forlogs,producingcountries'exportin1999were15.0millionm3valuedat

$2.3billion.Logexportsin1999decreased10%fromthelevelin1998.Logexportshavebeenst eadilydecliningforthepastdecade.Sawn-woodexportsbyproducingmember countriesdropped7%fromthe1998 levelto

7.9millionm3valuedatover$2.8billionin1999.Tropicalveneerexportsbyproducingcountri esreducedb y 4%fromthelevelof1998to1 millionm3valuedat$462millionin1999.Plywoo dexportbyproducingcountriesincreased10%fromthelevelof1998to12.4millionm3valued at$5.9billionin1999.

Totalconsumercountryimportsoftropicaltimberproductsin1998were$11.9billion, droppingto$11.7billionin1999,withJapan accountingfor37%,EUfor26%,Chinafor21%,andKoreafor9%.Importsoftropicaltimberpr oductsbyproducingcountriesin1999were$1.5billion,risingfrom$1.3billionin1998.

Tropicalhardwoodlogimportsbyconsumingmembercountriesdroppedby9%form the1998levelto14.6millionm3valuedat$3.1billionin1999.Totaltropicallogimportsin1999 were17.3millionm3valuedatalmost$3.7billion,whenimportsbyproducingcountriesareincl uded.Thisfigurecorrespondsto6%decreasecomparedtothelevelof1998.Japanremainedast hetopimporteroftropicallogsin1999,accountingforover45%ofallconsumercountrylogimp orts.Japan'simport,however,fellby13%to6.5millionm3in1999.

Totalveneerimportsbyallmembercountriesincreasedby12%to1.1millionm3valu edat$648millionin1999.Theincreasein1999importswasprimarilyduetoincreasesbyChina Chinawasthetopimporteroftropicalveneerin1999.EUwasthesecond,andJapanwasthelarg esttropicalveneerimporters.

Japanremainedasthedominantimporteroftropicalplywood.Japan'splywoodimpor tincreasedby8%from1998levelto4.0millionm3in1999.Thisfigurecorrespondsto40%oftot alimportsof10.9millionm3valuedat$5.1billionin1999.

[Babieret.al,p.20].Themajorcauseoftropicalforestdepletionisnowwidelyacknowledgedto beslash-and- burnforlocalagricultureandsettlement.Therefore,trademeasuresalonemaynotbeabletored ucetherateoftropicalforestsdepletion.Directmeasurestoreduceslash-and- burnpracticeinproducingcountriesareusuallyconsideredimperativefortropicalforestsconse rvation.

Itmaybepossibletousetrademeasureasaleveragetoreduceslash-and- burnpractice.Althoughthetradeisnota majorcauseoftropicalforestsdepletion,theincomefro mtropicaltimbertradeisstillaveryimportantsourceofforeigncurrencyearningsformanyofth eproducingcountries.Iftheinternationalcommunity,oraninternationalorganizationsuchasI nternationalTropicalTimberOrganization(ITTO),cansucceedinguaranteeingattractiveinc omefromtropicaltimbertradebyintroducingtrademeasuressuchasexportquotaallocationor bufferstocksystem,producingcountriesmaywillinglyrestrictdepletionb y slash-and- burnpractice.Ortheproducingcountriescanbepersuadedintoacceptingtraderulesincludings anctionmeasuresagainstthoseproducingcountriesthatdonotmanagetheirtropicalforestsres ourcessustainably.Ifsuchrulesareestablished,theruleswouldprovideproperincentivesforth eproducerstotakenecessarymeasurestomaketheirforestsresourcesustainableinordertoavoi dsanctions.

International agreements are often seen as the optimal solution for tackling global environmental conservation issues, yet they have significant limitations While these agreements establish a legal framework for the global community, they lack the authority to enforce compliance among sovereign nations Each member country retains the right to withdraw from the agreement at any time, which undermines the enforcement of conservation measures Although producing countries may agree to certain conservation practices for commercial benefits, they are unlikely to accept conditions imposed by consuming countries that they find unacceptable, leading to potential withdrawals Consequently, the effectiveness of international agreements in implementing tropical forest conservation measures is considerably restricted.

Nevertheless,thedegradationofglobalenvironmentisadvancingatanalarmingrate. Particularly,theCO2emissionisincreasingrapidlydespitetheseriouseffortsbytheglobalcomm unityunderKyotoProtocol,whileeveryscientistissurethattheglobal warmingcausedbyCO2emissionwillinvitecatastrophicresulttoour planetandalllivingcreaturesincludinghumanbeingslivingonit.Deforestationisgivingwron gimpetustothiscatastrophictrend.Everyoneagreesthatthistrendhastobeaverted,butstillther eisnoconsensuswhenitcomestotheactualimplementationplansintroducedbyinternationalo rganizations.

Wedonothavemuchtimelefttotakeactionsbuttheissueofenvironmentalconservatio nunderthebindingprinciplesofinternationalorganizationisstillafutureissue.Inparticular,wh ileexpansionoftradeisanimportantfactorforthedegradationofglobalenvironment,theissueo f“tradeandenvironment”alsoremainsafutureissueunfortunately.

Japanexperiencedseriousenvironmentaldegradationaround1960swhenthecountr ymaintainedextremelyhigheconomicgrowthofover10percentannualrate.Japan‟sso- called“miracle”recoveryoutoftheashesandruinsresultedfromtheWorldWarIIwasachieve dmainlyowingtotherapidgrowthinexport.Thefirstsurgeofexportincreasewastriggeredbyt hewarinKoreanpeninsulain1955.TheUnitedStatesanditsalliesneededhugeamountoflogist icalgoodstosupporttheirtroopsinthepeninsula.Japansuccessfullyexpandedandextendedth edynamismandimpetussetbythisspecialdemandbycontinuouslyallocatinginternalresour cesforyearstosomeoftheleadingexportindustries.Nevertheless,Japan‟ssuccessdependedh eavilyonthefreedomesticmarketsupportedbythedemocraticpoliticalsystemwhichwasquit euniqueinAsiathen.During1960sand1970s,JapancreatedamodeltowhichotherAsiancount rieslateradoptedastheirmainstrategytopursueeconomicgrowth,i.e.,theexportledeconomic growthdependingparticularlyonthelargeUSmarket.

The rapid economic growth in Japan, while miraculous, led to severe environmental degradation due to toxic discharges from export-producing plants contaminating air, land, and water During this period, there were minimal regulations addressing pollution, with a focus on boosting exports over public health and environmental protection This negligence resulted in catastrophic health consequences, including deaths from contaminated water and food, as well as respiratory issues from toxic fumes It wasn't until these issues became a significant social concern that the Japanese government implemented measures to protect public safety Although the exact economic damages from pollution are hard to quantify, it is believed that overall economic achievements could have been greater had proper regulations been established earlier, despite the potential slowing of initial growth.

SouthKoreaisnowa memberofOECD,knownasthe“richmen‟sclub.”SouthKorea alsotookthesimilareconomicgrowthpathlikeJapan,butitwasonlyafterthecountryestablishe da democraticsysteminearly1980s.Thegoodgovernancesupportedbydemocraticpoliticals ystemisasignificantsoftinfrastructureformakinga realeconomicadvancementtotakeplace. Underthenon- democraticgovernmentsystem,botheconomicandhumanresourcesmaynotbeallocatedpro perlytomaximizethebenefitofthepeopleandsocietybecauseofthegovernmentdecisionsnot consistentwithcompetitivemarketprinciples,byfavoringtheirownineffectivepoliticalagend a.Corruptioninthepublicsectorisanotherseriousexampleofsuchinefficiency.

SouthKoreaintroducedtheexportoriented economicgrowthstrategyasJapandidin1960s,alsomainlyutilizingtheUSmarket.Pollutionb ecameaseriousprobleminSouthKoreaduringtheeconomicgrowthperiodbutthedegreeofda mageswasmuchsmallercomparedtothatofJapan.ProbablythisisbecauseSouthKoreacouldl earnfromtheexperiencesofJapan.ThedemocraticsysteminSouthKoreaworkedeffectivelyi nintroducingmeasurestoprotectthehealthofgeneralpublicb y notallowingthegovernmentt opursueeconomicbenefitattheexpenseofthewelfareofthepeople.

TheexperienceofChinawouldbethebestexampleforVietnaminpursuingits economicgrowthbecauseChinaresemblesVietnaminmanyaspectsincludingpoliticalandec onomicsystems.Thelevelofdevelopmentisalsosimilartoeachothercomparedtothatofcount ries likeJapanandSouthKorea.Further,China‟seconomicgrowthisdeeplyrelatedtoitsWTOme mbershipgrantedinNovember2001,whichVietnamalsogainedinJanuary2007.China‟seco nomicgrowthoriginatedinthechangeofitsfundamentaleconomicpolicyfromMarxismecon omytomarketeconomyasadvocatedbyDengXiaopingin1978,whichlaterbecame“socialist marketeconomy”asalsointroducedbyDengXiaopingin1992.Likewise,Vietnamalsochang editsfundamentaleconomicpolicyfromMarxismtothewesternstylemarketeconomyknown asDoiMoiinlate1986.DoiMoiisstillthebasisofVietnam‟seconomicsuccesseveninrecentye ars.

However,Chinaisaspecialcountrybecausethesizeof itsmarketis byfarthelargestintheworld.Allothercountriesintheworldhavekeeninterestincrackingintot heChinesemarkettogainandsecuretheirlong- termprofits.VietnamisnotasmallcountrybutthesizeisnotcomparablewithChina.Whenwetr ytolearnfromtheexperiencesofChinaforthesakeofeconomicdevelopmentinVietnam,thisp ointshouldalwaysbekeptinmind.

China‟seconomicgrowthgainedimpetusinmid1990s.ThisisthetimewhenChinaad optednewpolicyinsecurityaswell.Chinamadeitcleartotheworld,particularlytotheneighbor ingcountries,thatChinaputpriorityinimprovingeconomicrelationswithothercountriesbyset tingasideitspoliticalagenda,suchasspratlyislandsdisputeandborderissuewithVietnam.Chi naalsojoinedASEANRegionalForum(ARF)in1994bychangingitstraditionalsecretivesecu ritypolicy,agreeingthatconfidencebuildingthroughdialoguewouldbeanimportantpartofreg ionalsecurity.First,ASEANandotherneighboringcountrieswereskepticalagainsttheChines eattitude,butChinagraduallygainedtrustfromtheinternationalcommunitythatChinareallyn eedspeacefulrelationsinordertopromoteitseconomicdevelopment.

ItshouldbenotedthatoriginalfiveASEANcountrieshadmoreorless succeededinadvancingtheireconomicdevelopmentbyaggressivelyincreasingtheirexport,p articularlytotheUSmarket.HugetradeimbalancetothefavorofASEANcountriesagainstthe USwasthelargestfactorforASEANcountriesinmaintaininghigheconomicgrowthforabouta decadeuntiltheeconomiccrisisin1997.ChinaprobablynotedthesuccessoforiginalASEANc ountriesandtriedtotakethesamedevelopingstrategy.Thechangeininternationalsecurityclim ateafterthefallofBerlinWallalsoprovidedgoodopportunityforChinainadoptingnewpolitica l,securityandeconomicpolicy.

Byadoptingexport- orientedeconomicgrowth,justlikeotherAsiancountrieswhichalreadysucceededwiththesam estrategy,Chinaachievedhugesuccessinmaintainingextremelyhighlevelofeconomicgrowt hinrecentyears.InvestmentispouringintoChinawhichresultedinmakingChinaasalargepro ductionbasefortheglobalmarket.Chinaiskeepingitscompetitivenessbyfixingitscurrencyex changeratetoalowlevelagainstforeigncurrencies,whichmaybethemostimportantfactortos upportthehugenessofthesuccess.

China faces significant challenges due to its lack of democracy, particularly in its military expansion, which occurs without transparency or accountability This situation hampers foreign relations and the allocation of funds for the private sector It is suspected that a substantial portion of government resources is diverted to the military instead of fostering economic growth and social benefits In a democratic system, citizens would likely prioritize government spending on the private economy rather than military and public sectors Corruption is a serious issue, exacerbated by the one-party dictatorship, and the absence of journalistic freedom hinders effective oversight of government expenditures While maintaining high economic growth is typically difficult in a non-democratic regime, China's vast market size has allowed it to achieve this Nonetheless, the economy could be even more dynamic if the people's power were adequately reflected in government policies.

ThemostconspicuousdisadvantageofChinabeingnota democracyisthatthereseem stobeaseriouslackofmeasuresforthemanagementofpollutionsandtheprotectionofenviron ment.ThegovernmentofChinasetsahightargetunderitsfiveryeareconomicgrowthplan.Acc ordingly,theeconomicgrowthgainspriorityagainstothermeasuressuchaspollutioncontrol.T herequirementfromthemilitarysectortoexpanditsmilitarycapacityalsosuppressesfundsava ilableforotherbudgetforthepromotionofpeople‟swelfare.ThisaspectofChinaistotallydiffe rentfromtheeconomicsuccessofJapanbecauseJapanalwayskepttheexpenditureformilitary sectorunder1percentofitsGDP.Thatwaspossibleowingtothestrongcriticismfromfreejourn alismandthedemocraticpowerofthegeneralpublic.

Environmental degradation in China has reached alarming levels, making it increasingly difficult to ensure a healthy quality of life, especially in major cities Recent reports indicate that sulfur dioxide (SO2) emissions in these urban areas have hit 0.053 mg per cubic meter, a level reminiscent of Japan's severe air pollution crisis in the early 1970s, which resulted in numerous health issues and fatalities Furthermore, China faces significant international scrutiny, as highlighted during the COP13 conference in December 2007, where it was reported that China's CO2 emissions were the second highest globally at 17.5% of total emissions, trailing only the United States Projections suggest that China may surpass the U.S in CO2 emissions as early as 2007.

Theadventofnewpoliticsoftradestatedinthepreviouschapterwillcertainlyinfluenc ethetradepolicyofVietnamonceVietnambecomesa memberofWTO.Particularly,thetradea ndenvironmentissueseemstoaffectVietnammorethanotherissuesbecausetheenvironmenti sincluded,thoughpartially,inthecurrentDoharoundnegotiations,andalsobecause

Vietnam applied for WTO membership in 1995, with a commitment to join by the end of 2005 To achieve this, Vietnam needed to finalize bilateral negotiations with member countries and establish a multilateral protocol governing the conditions for new members By July 2005, Vietnam successfully concluded bilateral negotiations with 13 out of 20 requesting countries and completed 8 Working Parties in Geneva by August 2005 However, the challenge remained significant, as Russia, also aiming for WTO membership by the end of 2005, had already concluded 23 Working Parties and bilateral negotiations by March 2005, making Vietnam's goal appear increasingly difficult.

Vietnam faced significant challenges in aligning its domestic laws with WTO rules, requiring amendments to approximately 100 laws Given that the Vietnamese Congress typically passes only about 10 laws annually, this task seemed daunting Although the Vietnamese government asserted that international treaties would take precedence over domestic laws, many WTO member countries remained unconvinced, as there was no assurance of effective implementation without relevant domestic legislation Consequently, some member countries suggested a monitoring mechanism to ensure compliance before Vietnam could officially join the WTO Despite these hurdles, Vietnam successfully negotiated with around 20 WTO member countries and became an official member in January 2007 This membership underscores the need for Vietnam to diligently work towards meeting WTO regulations and the conditions set by these member countries to avoid potential trade sanctions.

AnotherdifficultresponsibilityofVietnamunderWTOagreements,ofcourse,istrad eliberalization.Vietnamneedstoreduceitstradebarriertobecomeacountrywithinternationalt radestandard.However,Vietnamesedomesticindustriesarestillnotverycompetitivebecause theyhavebeenprotectedundersocialisticeconomicsystemformanyyears.Therefore,ifVietn amopensitsmarkettoWTOmembers,manyofthesenon- competitiveindustriesandfirmsmaygobankrupt,whileWTOmembersmaynotprovideconc essionswhichwouldextendunfairadvantagesfortheproductsproducedinVietnam.

Amongmanyotherissuesrelatedtotrade,laborandenvironmentseemtobe themostimportantissueswhichmayaffectthetradeofVietnam.Laborisapossibilitybecauset heaveragewageinVietnamisquitelowandsomeindustrialcountriesmayclaimthewageleveli sabaseofunfairtradepractice.Somecountriesmayclaimthatthelaborofminoritypeopleisbei ngexploitedinVietnam.However,thoseclaimsarehardtobeverifiedandthesituationinVietn amdoesnotseemworsethanotherdevelopingcountriesatall.Mostofall,thecurrentDohanego tiationsfailedtoincludethelaborelementdespitea strongrequestfromsomeindustrialmembe rs.ThetradeandlaborissuecouldbeaseriousissueinthefuturebutforthetimebeingVietnaman dotherdevelopingcountriesdonothavetoworryabouttheissue.

Ontheotherhand,thetradeandenvironmentalissuecanaffectVietnamasamemberof WTO.Asstatedabove,environmentalissuehasbeenincludedinthecurrentDohanegotiations. Therefore,thenewWTOagreementmayregulatecertainconditionsontomembersinrelation withenvironment.Forexample,Vietnamorotherdevelopingcountriesmayhavetoreduceind ustrialwasteorintroducestrictenvironmentalprotectionlawsinordertoavoidtraderetaliationf romindustrialcountries.Mostlikely,thenewWTOagreementswillnotintroducesuchambitio usanddrasticchangestothecurrenttraderulesbutthetrendtolinkenvironmentalissuesandtrad ewillcontinuetobestrengthened.

ApartfromenvironmentalrulesrelatedtoWTO,therehasbeenaremarkableprogressr elatedtotradeandenvironment,namely,theCleanDevelopmentMechanism(CDM).

TheCleanDevelopmentMechanismisoneofthethreeso- calledflexiblemechanismsoftheKyotoProtocol.Thesemechanismsaredesignedtomakeitea sierandcheaperforindustrializedcountriestomeetthegreenhousegas(GHG)emissionreducti ontargetsthattheyagreedtoundertheProtocol.TheCDMisalsomandatedto

UndertheCDM,anindustrializedcountrywithaGHGreductiontarget(anAnnexB c ountryoftheprotocol)caninvestina projectina developingcountrywithouta target(non- AnnexB),andclaimcreditfortheemissionsthattheprojectachieves.Forexample,anindustrial izedcountrymayinvestinasolarpowerprojectinadevelopingcountrythatreplaceselectricityt hatwouldotherwisehavebeenproducedfromfossilenergy.Theindustrializedcountrycanthe nclaimcreditfortheemissionsthathavebeenavoided,andusethesecreditstomeetitsowntarget Forindustrializedcountries,thisgreatlyreducesthecostofmeetingthereductioncommitment sthattheyagreedtoundertheKyotoProtocol.

(i) Renewableenergyprojectactivitieswitha maximumoutputcapacityequivalen tofupto15megawatts(oranappropriateequivalent);

(ii) Energyefficiencyimprovementprojectactivitieswhichreduceenergyconsum ption,onthesupplyand/ordemandside,byuptotheequivalentof15gigawatt/hoursperyear;

(iii) Otherprojectactivitiesthatbothreduceanthropogenicemissionsb y sourcesa nddirectlyemitlessthan15kilotonesofcarbondioxideequivalentannually

Bytheserulesandregulations,theCleanDevelopmentMechanismhasbeensetinmot ion There arenowagoodopportunitiesforbothdevelopedanddeveloping countries,includingVietnam,topursuesustainableeconomicgrowthunderthesystem.

InVietnam,itismostlikelythatCDMmechanismisutilizedintheforestsectorbecaus etheGovernmentofVietnamputahighprioritytoachieve5millionhaforestationproject.Inor dertoachievethis,theGovernmentofVietnamneedssupportfrombothofficialandprivatesect orstoextendfunds.ForeigncountiesmayextendsupporttothisprojectundertheirODAschem e;however,thecalculationofCDMcreditsunderODAprogramsparticularlyloanprogramsha snotbeenclarified.ThisneedsfurtherelaborationbyCOPmeetingsanditsExecutiveBoard.N evertheless,foreignprivatesectorsarealsoverymuchinterestedinimplementingprojectstosu pport theVietnameseforestation project, becausetheywillbeabletogaincreditsrelativelycheaplyinVietnam,orinotherdevelopingcou ntries,thantheycanobtainthecreditsintheirowncountries.Sincethesefirmsinindustrializedc ountriesareobligedunderCDMrulessetbytheirrespectivegovernmentswhichpledgedunder KyotoProtocoltoachievecertainlevelofGHGreductionbythetargeteddate.

Heretheproblemofeconomyarises.InorderfortheCDMtradetoberealized,therehas tobea conditionwhichisbeneficialforbothforeignprivatedeveloperandthegovernmentinth edevelopingcountry.Therearea numberoffactorswhichneedtobeconsidered.First,thecosto fforestationneedstobeidentified.Second,theopportunitycostofforestation needstobecalculated.Thisisparticularlyimportantbecausetheforestationveryoftenoff- setthevalueofthelandthatcanproducemoreeconomicbenefitsiftheyareusedasindustrial,co mmercialorhabitualsites.Thenthecostofforestationb y domesticofficialfundneedstobecal culated.Also,thecomparisonoftheofferedproject costsfrombiddersneedstobeconducted.Itisnecessarytoanalyze,therefore,ifequilibriumcan bereachedundertheseconditions.

Vietnamhasmaintained7.4%ofannualeconomicgrowthrateinaverageduringthepastfewye ars,whichisnextonlytoChinaintheregion.Environmentaldestructionhasnotbecomea serio usprobleminVietnamcomparedtootherfastdevelopingcountries,however,Vietnamwillcert ainlyfacevariousnegativeimpactsfromenvironmentaldegradationifpropermeasuresarenott akennowwhentheeconomygainingitsspeed.

Vietnamisconsideredasapilotcountrybyinternationaldonorsforextendingnewtyp esofassistancesincetheperformanceofVietnamasa recipientcountryisrecognizedexcellent. Accordingly,theamountofaidfromforeigncountriesisalsorapidlyincreasing.Withoutprope rconsiderationtotheenvironmentalimpact,theforeignassistancemaycauseenvironmentalde gradationwhenactualprojectsareimplemented.

InVietnam,19millionhaofland,correspondingto58%ofthetotalland,isclassifiedas forestarea.However,muchoftheareaisnotcoveredbytrees.Theactualareacoveredbywoods is11.3million ha,whichisdivided into9.7millionhaofnaturalforestand1.6millionhaofplantationforest.Theforestareadecreas edfrom1943till1993withtheannualaveragedepletionrateof100,000haperyear.Particularly, forestswereseverelydestroyedduringtheperiodofVietnam-

AmericanWar70sbychemicalweapons.However,theareaofforesthassteadilybeenincreasi ngsinceithitthelowestlevelof9.3millionhain1993.However,thereisastrongconcernontheq ualityofforestsinVietnam.Theforestswithclosedcanopyconsistonly13% ofthetotalforests,andthepoorly plantedforestsconsistsasmuchas

TheforestofVietnamisknownasoneoftherichestintermsofbiodiversity.TheVietna meseforestscontainasmuchas10%offaunaandfloraspeciesalthoughtheareaisonly1%ofth eglobalforestarea.

Timbertradehasnotcreatedseriouspressureagainstforestprotection.Theamountoft imberproductsexportedfromVietnamtoothercountriesisnotsignificantyetintheglobal timbertrademarket.Also,only10%oftheexported timberproductsfromVietnamisoriginatedinVietnam[ITTO,1996b,p.18-

43].Vietnamgenerallyimportlogsfromneighborcountriesandprocessthemandexport.How ever,itshouldbenotedthattheexportofwoodproductsfromVietnamisrapidlyincreasingduri ngthepastfewyearsduetotheinceptionoftheBilateralTradeAgreementwiththeUnitedStates (BTA)in2001andothertradepromotionmechanismsincludingAFTAandWTOaccessionne gotiations.Sincetheexportofwoodproductshasproventobeverylucrative,Vietnamindustrie smayturntoexploitlocalforestfortimberandwoodenfurnitureproductions.

ITTOhasdecidedcreateasystemtoallocatenecessaryfundforthesustainablemanag ementofforestsintimberproducingcountries.ThefundiscalledtheBaliPartnershipFund.Ho wever,theITTOhasnotdeterminedallocationplanofBaliPartnershipFundamongmemberco untries.Therefore,itisnotpossibletoidentifytheamountthatVietnamreceivesfromtheFund. TwoofthemostsimpleallocationarrangementsthatcouldbeadoptedbyITTOmaybeasfollow s:

1) TheFundmaybeallocatedtoproducingmembercountriesengagedinimplemen tationof2000YearObjectivebyproratebasisaccordingtoeachmembercountry'sshareinglob altropicaltimberproductionorexport.

Themethodstatedintheabove2)maybemoresuitabletodealwithdepletion problembecausethefundallocationisdirectlyrelated withtherateofdepletioncausedb y eachmembercountry.However,thismethodmaynotbesup portedundertheframeworkofITTObecauseITTOisa tradepromotionorganizationandthearr angementsforits2000

(ItshouldbenotedthatITTOallocatesamountofeachmembercountry'scontributiontoitsfirsta ccountinaccordancewiththeirtradeshare).IftheBaliPartnershipFundistobeallocatedamongI TTOproducingcountriesbyproratebasisaccordingtotradeshare,notmuchfundisallocatedto curvetropicalforestdepletioninVietnam.Althoughthistypeofallocationmethodisfamiliarwit hITTOmembercountries,itishighlyunrealisticbecause

Vietnamisactuallyincreasingitsforest area.Therefore,itisassumedherebythattheBaliPartnershipFundistobeallocatedaccordingto eachproducingmembercountry'sresponsiblerateinglobaltropicalforestdepletion.However, asstatedabove,muchoftheVietnameseforestsarenotproperlymanagedassustainableforestsa nditwouldbepossibletocalculate thattheforestarea hasdecreasedfrom14.3millionhatomere1.47millionha.Underthisassumption,3.5%oftheF undmaybeallocatedtoVietnam.Ifthetotal amount neededtoachieve2000 YearObjectiveisassumedtobe1500millionUSdollarsperyearagain,Vietnamwillrequireand receive52.5millionUSdollarstoachievesustainablemanagementofitstropicalforest.

Vietnam'sforestareahasrecoveredfrom27.6%in1990to34.4%in2000ofitstotallan d;therefore,itisconsideredthattheamountofforestresourcerequiredforsustainablemanagem entunderITTOframeworkwouldbelowerthancurrentlevel.Inotherwords,Vietnammightbe abletofurtherdepleteitsforestuntiltheforeststocksbereducedtotheminimumsustainablelev el.Hence, themostsuitablegamescenarioforVietnamshouldbedefinedasbelow.

ApplicationofEconomicTheoriestoEnvironmentalConservation

SustainabilityandBudgetLine–CaseStudyforForestConservation

Inthissection1.6,applicationoftheabovetheoriestointernationalorganization‟scon trolmechanismsanditssurroundingeconomicsituationwouldbeexamined.Generally,produ cingcountriestendtoassertthatalargeamountofcompensationisneededfromconsumingcou ntriesifthelatterrequesttheformertoforgoa partofeconomicvaluesbeingaccruedfromexploi tingthenaturalresource,whileconsumingcountriestendtorequestthatproducingcountriesals otakeresponsibilitytoprotectglobalenvironment.

Inthiscontext,therehavebeentwounofficialestimatesofnaturalresourcevaluesprovi dedbyprivateresearchers.Oneresearchconductedin1992estimatedtheamounttobeneededto achievethetargetedconservationoftropicalforestswouldbearound400millionUSdollarsper year.Accordingtothisresearch,thenetrequiredamountis300milliondollarsbecause100milli ondollarsarealreadybeingprovided.Theotherresearchestimatedthat1.5billionUSdollarsper yearisneeded[Barbieretal,p.140-142] 10

Beforeactuallyapplyingtheabovedatawitheconomictheories,itwouldbenecessary tointroducesomeotherbackgroundfiguresrelatedtotropicalforestsdepletionasanexample.T ables3.3.and3.6.intheChapter3 tellusthatoveralltropicalforestsannualdepletionrateis0.8% ,whileitsincreaseratebyplantationisapproximately0.2%during1980and1990.Therefore,a nnualnetdepletionrateisconsideredtobeapproximately0.6%.Figure1.12illustratescurrenta ndfuturemaximumproductioncurves(budgetlines)betweentropicaltimbernetconsumption andforestexploitation.Naturally,aslongasnetdepletionrateisapositive figure,thisbudgetlinewilleventuallyshrinktotheleftofthesustainableboundaryofS.Iftheglo baltropicalforestsplightbecomesthisstage,theycannolongerprovidesufficient

10The firstresearchwasmadein1992byWorldFoundationforEnvironmentandDevelopment–WFED.ThesecondresearchwasmadebyWorldConservationUnion–IUCN. environmentalservices,suchassinkcapacityofCO2,totheglobalcommunityeventhoughthe rateofnetdepletionthenbecomeszero.

11Even thoughtheproductioncurveshrinks,sustainablemanagementisstillpossibleiftheacknowled gedvalueofenvironmentincreasesandaccordinglythelevelofconsumptiondecreaseswhichisindica tedbythemovementfromAtoBinthefigure.

Gradual Reduction Curve Sustainable Boundary

12This diagramjustsimplyillustratesthatsustainablemanagementofforestswillnotberealizedinthey ear2020iftherateofdepletionaccelerates,whileitisstillpossibleunderthecurrentdepletionrate.

TheabovethreecasesareillustratedintheFigure1.13.Inanycase,aslongastheannual netdepletionrateispositive,tropicalforestsaredoomedtobewipedoutcompletelysoonorlater ,mostlikelywithina hundredyears.AstheFigure1.13shows,netdepletionratehastobecomez eroatapointinthenearfutureifthetropicalforestsaretobesustainablymanaged.Whatisgenera llyenvisagedtorealizethisGradualReductioncurveintheFigure1.13.Itisa simplefactthateith erorbothreductionindepletionrateandimprovementinplantationrateneedtobeachievedforr ealizationofthisgoal.

Thelevelofeffortsneededb y internationalcommunitydependsheavilyonwherethe sustainableboundarylevelis.IfthelevelSismuchlowerthantheoneintheFigure1.13,thegloba lcommunitycanspend much longeryearstorealizethisgoal.

1.15.TheFigure1.14isthecasetheinternationalcommunitydecidesthesustainableleveloftro picalforestsforits2010yeartargetisthelevelof2000 when this targetwasbeingformulated[ITTO,2003,p.38].Inthiscase,thetropicalforestdepletionhastob ereducedbacktothelevelofS00curveintheFigure1.14bytheyear2010.Thisscenariohasbeco memoreandmoreunlikelyastheforestdepletionhasnotstoppeduntiltoday.

Figure1.15illustratesthecasetheinternationalcommunitydecidesthesustainablelev elbemuchhigherthantheS00level.Thismaybepossiblebecausemostoftheconsumingcountr iesconsiderthattropicalforestsin2000werealreadyover- exploited.Inthiscase,tropicalforestsdepletionratehastobecomenegativetopushthedepletio ncurveuptothelevelofShintheFigure1.15.Thisscenariohasbecomevirtuallyimpossibletob eachievedbytheyear2000.Basedonthisreality,somecountriesstartedtodemand thatthetargetyearbepostponedfrom2010toalateryear.

Figure 1.16 illustrates the marginal abatement cost (MAC) recognized by consuming countries, the marginal damage perceived by producing countries (MDp), and the marginal damage affecting the global community (MDg) This innovative approach highlights the relationship between individual countries and the global community, moving beyond traditional marginal damage functions that focus solely on bilateral interactions Currently, forest depletion occurs at the intersection of these two lines, with a cost of maintaining this level set at 100 million US dollars If the global community aims to establish a sustainable level of forest exploitation at point S, the required annual contribution would increase to 400 million US dollars To achieve this, the marginal damage perceived by producing countries (MDp) must shift upwards to MDg, necessitating an additional contribution of 300 million US dollars from consuming countries.

Figure1.17showsthecasethat1.5billionUSdollarsarerequiredtoachieve2010yeart arget.ItsimplyindicatesthattheMDgcurvemustmakealargeshiftforachievinglevelSoffores tdepletion.Thecorrespondingamount,i.e.,1.5billionUSdollars,needstobecontributedfrom consumingcountriesunderthiscase.

Figure1.18isthecasethatMDpremainsthesamelevelandMACshiftsdownwardtoa chievethelevelS.Forthistohappen,producingcountriesneedtoprovidemeasuresorfundtoall eviatetheburdenofconsumingcountries.AsCoasetheoremindicates,ifthepropertyrightsofc hangingthelevelofenvironmentalqualityareproperlygiventoconsumingcountries,thenthis becomesarealisticcase.However,inreality,itistheproducingcountriesthathaveperfectsover eignovertheirinternalnaturalresources.TheFigure1.16isthecasethatthepropertyrightsare properlygiventoproducingcountries.Here,inaccordancewithCoasetheorem,MACcurvere mainsthesameandMDpcurveshiftstoMDgasresponsibilityofconsumingcountries.

AninterestingfindingisthattheFigure1.18isunrealisticinthiscase,whiletraditionalt heorytellsusthatthistypeoftransactionscantakeplaceasoftenasthosedepictedintheFigures1.16and1.17.Figure1.18isunrealisticbecausetheglobalcommunity,morepreciselyaninternat ionalorganization,isconsideredarecipientoffundandbenefitfromamembercountry.Fromth ispointalone,thisapproachshouldbeconsideredinnovative.

15While theFigures1.16and1.17explainthattheglobalcommunityowesfinancialcontribution,Figur e1.17illustratesthecaseunderwhichaproducingmembercountryshoulderthefinancialresponsibilit y.

Game theory scenarios and possible contribution arrangements of 46internationalagreements………………………………………….……… 1.7 SummaryofResults

Inthisthesis,twobasicscenariosareintroduced.Thefirstscenarioisassumedfortheca sewhereaninternationalorganizationconductsitsconservationactivitiesutilizingthefundpro videdfrombothconsumersandproducersofthenaturalresource.Sinceitisgenerallyrecognize dthatthegametheoryisthebestsuitedeconomictheorytoexaminetheeffectsofeconomicexter nalitieswhichincludeenvironmentalresources,thegametheoryisherewithemployedtoanaly zetheeffectivenessoftheinternationalorganization[Suzuki,p.67-

69].Foreachgametheoryscenarioforproducersofenvironmentalresources,thesecondscena rioisintroducedtoexaminetheeffectoffundtransferfromconsumerstoproducersasa meanso fcompensation.Thecase1isthegameunderwhichproducersandconsumersareassumedtosha rethesameenvironmentalvalueintheresources.Underthecase2,producersareassumedtoide ntifynovalueintheenvironmentalassets.Producersareassumedtoidentifythehalfasmuchen vironmentalvalueasconsumersdounderthecase3.

Here,1500millionUSdollarsisassumedasanannuallyneededamountforglobalcon servationofanenvironmentalresource.Thispossiblyimpliesthatsustainableenvironmentalv alueoftheresourceisrecognizedtobeUS$1500millionandthatthemagnitudeofdamagetothe environmentisalsoUS$1500ifthereisnocontributionmadetoprotecttheresource.Thisrelatio nbetweencontributionandenvironmentalvalueundertheaboveassumptionscanbeputinane quationasshownintheFigure1.19(Scenario1).

Basedonthis equation,agameillustratedintheBox1.2 16would beemployedtoexaminepossibledistributiono fcontributiontothefundsetbythememesofan

Box1.2andotherstochecktheactualfunctionofBox1.1. internationalorganization.TheglobalenvironmentalvalueincolumnsI,IIandIIIintheBox1.2 is1500milliondollarsbecausethisistheassumedamounttoachievesustainablelevelofthereso urcemanagement.Anyamountunderthisamountisassumedherebyunsatisfactory.

(ii) WheneitherConsumersorProducershaveintentiontomakecontributiontot hefund,thefundwillbefullysuppliedeventhoughtheotherpartydoesnotmakeanycontributio natall.

(iii) Factor"e"adoptedinthemodelv ofthe1990Ostrom'sthesisisassumedtoexis t.Therefore,thegamesplayedinthisthesisdonotfallintoprisoners‟dilemma.Inthis thesis,the"e"isdefinedasthecostofenforcementbypenaltyanditwillbeactivatedwhengames failduetothechiselingbymembercountries.

(iv) Furtherinthisthesis,avariationof"e"isintroduced.Itissymbolizedas“a”anditst andsfortheself- arrangedarbitrationsystemwhichenforcethearbitrationbasedonthemutualagreementofme mbersconcernedondisputes.Thearbitrationsystemisassumedtoexistbehindallgamesandto providemaximumtransparencyofnegotiationandinformation.

Theleftfigureineachcolumnindicatesthetotalvalueforconsumingcountriesandther ightfigureindicatesthetotalvalueforproducingcountries.Basedontheabove- mentionedassumptions,eitherconsumersorproducersareexpectedtoprovideentirecontribut ioninthecolumnsIIandIII.BothgroupswouldcontributethesameamountinthecolumnI,whil ebothprovidenocontributioninthecolumnIV.

Gv=GlobalValueofanenvironmentalresourcePpContributionpaidbyProducingCountriesCp=Cont ributionpaidbyConsumingCountries

Box1.2:ContributiontotheFundandGameTheory 18Scena rio 1(Gv=2(Cp+Pp)1500)

18As inthecaseforFigure1.19,Gv=E≧(C–S)/ ΔOSisalwaysneededtobesatisfied.Thiswillbethesamefortheallofthesubsequentgamesinthisth esis.

1.5illustratehowthebudgetallocationtothefundcanbemadebetweenproducingcountriesan dconsumingcountriesinaccordancewiththeoryofcollectiveactionsbyusingthegamedescrib edintheBox1.2.TheBox1.3illustratesthecasethatbothproducersandconsumersvaluetheen vironmentalaspectofthenaturalresourceequally.FifteenhundredmillionUSdollarsisassum edtobetheamountrequiredtothefund.InthisBox,itispresumedthatbothproducersandconsu mersarerequestedbytheorganizationtocontribute750millionUSdollarseachtoacquire1500 millionUSdollarsequivalentofenvironmentalservicesfromtheresource.Itisalsopresumedth atthevalueoftheenvironmentalservicesisrecognizedbythebothsidesequallybeneficial.Inthi sgame,asatraditionalgametheoryindicates,thelogicalresultwillbethecolumnIVinwhichbo thdonotcontribute.Ifthebothsidesbehaveindividuallytoobtainthemaximumbenefitforthem selves,thisistheinevitableresult.Inotherwords,ifthecontributionislefttothemarketprinciple s,thefundwillinevitablyfail.Nevertheless,itisclearthatthecolumnIisabetterresultthanthecol umnIVforbothplayersofthegame.Thisbetterresultcanbeobtainediftheycooperatethroughc ommunicationandinformationexchange.Ostrom(Governingtheglobalcommons,1990)intr oducedaverydetailedanalysisofthegametheoryandconcludedthata built- inenforcementmechanism(factor"e")andpropercommunicationcanpreventgamesfromrea chinglessdesirableresults.ITTOisindeedanorganizationwheremembercountriesabidebyth ebidingrulesandexchangeinformationtoseekthebestarrangementsforthemtoinducemaxim umbenefitwithoutrelyingonmarketforces.Itshouldbenotedthatcommodityagreementsarea cceptedasanexceptionoffreetradeunder

GATTXX(h).GATTallowscommodityagreementstocomeupwithantimarketmeasures.He nce,itwouldbepossibleforthefundtoreceivesufficientcontributionsfrommembercountriesj ustlikethegameillustratedinthe Box1.3.

Box 1.4 highlights that producing countries often do not recognize the value of environmental assets and lack incentives to contribute to environmental funds This scenario reflects a common reality among international organizations, where producing nations typically expect consuming countries to cover all costs associated with resource utilization as compensation for opportunity costs In the situation depicted in Box 1.4, even with effective communication, producing countries are unlikely to contribute to the fund The ideal outcome for environmental protection occurs when consumers assume full responsibility for contributions, represented in Column II However, this is unlikely if consuming countries view environmental quality as a universal resource Consequently, game theory suggests that the most probable outcome is the bottom right scenario, which could have disastrous implications for the global community.

Box1.5illustratesthecaseproducingcountriesidentifyonlyhalfoftheenvironmental valuerecognizedbyconsumingcountries.Inthisgame,thebestresultforenvironmentconserv ationiseithercolumnIorcolumnII,butforthistohappen,membersmustovercomethelogicalr esultofthecolumnIVaspredictedbythetraditionalgametheory.Iftheyovercomeit,itisleftfort hebothpartiestonegotiateanddecidewhichonebetweenIandIIistobechosen.

Inrealty,itwouldbeverydifficulttoachieveconservationifproducingmembercountr iesdonotrecognizeanyvalueinenvironmentalqualityoftheresource.Nomatterhowlargethec ontributionfromconsumingcountriesis,damagetotheresourcemaynotbealleviatedundersu cha case.Costestimationalsotendstobecomeimpracticallyhigh.Thisshouldbetruefromtheg eneralunderstandingthatanefficientoutcomecannotbeobtainedwhenthereisnoincentiveto doso.UnderthefactthattheenvironmentalassetsareCPRsorpublicgoods,thiswouldbepartic ularlytrue.

Therefore,itisnecessaryforinternationalorganizationstoletbothoftheirproducinga ndconsumingmembercountriesrecognizethattheeffortsandcooperationb y bothsidesarene ededtopreventthedepletionoftheresourcewhichiscounter- beneficialforallcountriesintheworld.Inordertodothis,furtherresearch andnegotiationsarerequired.Itishopedthattheseresearchesandnegotiationsofinternational organizationswillleadtothecreationofcommongoalandcommonvalueforallmembers.Thea bovecaseintheBox1.4hadbetterbeavoided.Ifallmembercountriesrecognizethesameenviro nmentalvalueoftheresources,thegameslikeintheboxes1.3and1.5wouldbecomepossible.

Box1.6indicatesthecasethecontributionsfromconsumingcountriesaretobegivend irectlytoproducers.Producingmembercountriesmayclaimcompensationfortheir opportunitycostiftheyhavetogiveuptheir economicactivitiesanddevelopmentschemesinachievingthesustainabledevelopment.Infa ct,economicdevelopmentisthekeyfactorthatcausesdepletionofnaturalresources.Here,itisa ssumedthatthesaid1500millionUSdollarsneededtoachievethetargetincludecoststocompe nsatetheforegonevalueofopportunitycostforproducers.Therefore,thefundneedstosupplyc ashtoproducingcountriesengagedinpursuingsustainablemanagementoftheirresourcesatth eexpenseoftheireconomicdevelopment.Underthisscenario,therelationbetweencontributio nsandconservationvaluecanbeillustratedasshowintheBox1.6(Scenario1b).

Scenario1b(Gv=2(Cp+Pp)-1500)&(Pv=Gv-Pp+Cp)

Box1.7,Box1.8andBox1.9respectivelyindicatethecasescorrespondingtotheirsce narioboxes1.3,1.4and1.5.Namely,Box1.7showthecasebothconsumersandproducersperce ivethesamevalueintheresourcesasenvironmentalassets.Box

1.8showsthecaseproducersdonotseeanyenvironmentalvaluesintheresource.Box1.9show sthecaseproducersrecognizehalfoftheenvironmentalvalueperceivedb y consumers.

Underthesegames,totalvalueforproducersinthecolumnsIandIIismuchhigherthant hevalueobtainedinthegames1.3to1.5whereconsumerscontributionsare notassumedtobedisbursedtoproducers.Therefore,thepossibilityforproducerstofree- rideandtrytogainhighvalueinthecolumnIIismuchhigherunderthisscenario.Inthissense,the segamesareconsideredtobemorelikelytofailinprotectingtheresources.However,itisalsopo ssibletoconsiderthatmoremotivatedproducerswouldnegotiatehardwithconsumersandwou ldsucceedpersuadingconsumersintopayallthecontributions.Then,thegame willbesettledinthecolumnII.

Further,hereagain,relaxationofgameconditionsasstatedinOstrom's1990articlema ymakeitpossibleforproducerstoparticipateinthefund.Sincethevalueforproducersinthecolu mnI ishigherthanthegames1.3to1.5,theincentiveforproducerstoavoidcolumnIVandtrytore alizethecolumnIisalsohigh.Inthissense,thesegamescanbeconsideredmorelikelytoinducep roducerstocontributetothefund.Themost distinctivecaseisthegameillustratedinFigure1.9.Inthisgame,thevalueinthecolumnIisequal tothatinthecolumnIVforproducers;therefore,theproducershavelessdifficultyincontributing.Inthegame1.4,thevalueforproducersinthecolumnIwasmuchlowerthanthatinthecolumnIV;therefore,itismoredifficulttoexpectproducerstocontributeunderscenario1athan1b.

Pv00(Gv)-750(Pp)+750(Cp)00II:

+1500(Cp)000III:Gv=2*{1500(Cp)+0(Pp)}-

+0(Cp)=0IV:Gv=2*{0(Cp)+0(Pp)}-1500=-1500

Pv=0(Gv)-750(Pp)+750(Cp)=0II:

+1500(Cp)00III:Gv=2*{1500(Cp)+0(Pp)}-

Pv00(Gv)/2-750(Pp)+750(Cp)u0II:

+1500(Cp)"50III:Gv=2*{1500(Cp)+0(Pp)}-

TheFigure1.20illustratesthecasewhenproducerscompromisetotaketheirownm easurestoconserveenvironmentalresources;therebymakingitpossibleforconsumerstopay smalleramountofcontribution.

IntheFigure,notonlyMDcurvechangesfromMDptoMDg2butalsoMACcurveshiftsfrom MAC1toMAC2.

Thisoutcomeshouldcorrespondtoafewcasesillustratedinthepreviousboxessuchascolumn Iin theBoxes1.3and1.7,thecolumnIandIIoftheBoxes1.5and1.9.

19It isassumedthattheself- establishedrulesofarbitratorhaveapoweroverbothproducingandconsumingmembercountriesfor thecasesofMAC2andMDg2.TheconditionforthecooperationunderOstrom‟sthesis,i.e.,“e,”exist sbehindthecasesoverMDg2andMAC1orMDpandMAC2.

TheFigure1.21illustratesthebudgetlineofcontributiontothefund.IfUS$1500milli onisconsideredtobetheminimumamountrequiredforsupportingsustainablemanagementof theresources,contributionfrommembercountrieshastobemadesomewhereonthisbudgetlin e.

1.21.Thisisthepointwhereproducing countriesandconsumingcountriescontributethesameamount.B isthepointwhereconsumin gcountriesbearallcontributiontothefund.Sincethefundshouldbasicallybedesignedtoprovi denecessaryfundforproducingcountriestotakemeasuresinpreventingover- exploitationoftheresources,itmaynotbepropertoconsiderthatproducingcountrieswouldma keactualcontributionb y cash.Consumingcountriesarerequestedb y producingcountriesto payentireamountthoughitisnotlikelyforconsumerstobearalltheresponsibilities.Evenavery smallamountofactualmonetarycontributionfromproducingcountries,suchasthepointC,do esnotseemtobeagreed.However,ifproducingcountriesagreetobearapartoftheburden,notac ashcontribution,andsharepositiveresponsibilityfortheprotectionoftheresources,therequire damountforthefundcanbereduced.Ifproducingcountriescontributebysuchaway,theactualf ormofcontributioncouldbeastheintroductionofinternallegaloradministrativemeasuresonc onservationofenvironmentalresources.Sincesuchmeasuresareexpectedforproducingcount riestosacrificealargeamountofeconomicvaluestobeobtainedfromutilizationoftheresource s,producingcountriescanhavetherighttoclaimthatthesemeasuresarecontributiontothefund eventhoughnocashcontributionismade.

If the internal measures taken by producing countries are valued at approximately $500 million, this is represented by point D in Figure 1.21 However, since there is no actual cash contribution from producers, this scenario is better illustrated in Figure 1.22, where the original budget shifts downward due to contributions from producing countries Point D' indicates where actual cash contributions are made to the fund, highlighting that the level of cash contribution is contingent upon the efforts of producing countries Consequently, negotiations are expected to center on both the internal legal and administrative measures implemented by producing countries and the cash contributions from consuming countries For sustainable resource management, it is essential to secure either a complete cash contribution of $1.5 billion from consuming countries or a fair burden-sharing arrangement between producing and consuming nations.

Asdiscussedpreviously,itwouldnotbetheoreticallyviablefortheformersolutiontoh appenbecauseconsumingcountriesdonotconsideritisthebesttacticsforthemtotake.Likewis e,thelattersolutionwouldalsonotpossibleaslongasproducingcountriesdonotfindnecessary valuesinconservation.Hence,asalreadydiscussedbefore,negotiationsforlegalbindingframe workunderaninternationalagreementbecomeindispensableforsustainablemanagementtob eprovided.Consensusreachedbynegotiationsonlegalbindingagreementwillmakesustainab lemanagementpossiblejustasOstromsuggestedinhis1990article.B y thisway,thedefectoft hemarketsysteminregardtoconservationcouldpossiblybeovercome.

20A correspondstoColumnIofthegameformat,andBtoII.CandDareoptionalcasesbuthardtobeachi evedwithoutcompensationfromconsumingcountriestoproducingcounties.EitherCorDdependsont helevelofcompensation.

TheFigure1.23indicatestherelationbetweencontributionsandenvironmentalvalu eisrepresentedbyanequationGv=Cp+Pp(Scenario2).Underthisformula,Globalenvironme ntalvaluefortheresourceconservationissimplyconsideredtobeequaltototalcontributionsfro mbothconsumersandproducers.Thisscenarioimpliesthatsustainableleveloftheresourcesto ckislowerthancurrentstock.Inotherwords,thefund willbeutilizedtoachievesustainablemanagementlevelinthefuturebycurvingtherateofdeplet ion.

OnthecontrarytotheconceptcontainedintheFigure1.23,theFigure1.24explainsthe casewherethecurrentstocklevelisalreadybelowthesustainablemanagementlevel.Therelati onbetweencontributionsandenvironmentalvalueinthiscaseisillustratedbyanequationGv Cp+Pp-

Itisveryimportanttonotethatthecoefficientforthevariable,i.e.,Cp+Pp,isgenerallys mallerthescenario2,becausetheefforts neededtoachievesustainablelevelisconsideredmuchharderwhenthestartingpointisfinancia llynegative.Inthisthesis,thecoefficientforbothscenario2and3aresetas1forconveniencebut inanactualworld,thecasescorrespondingtothescenario3areconsideredtobedifficultinterms oftheachievabilityforthesustainablemanagementofforest.Thismeansthatifweassumethec oefficientforthescenario2asc2andthatforscenario3asc3,theequationC2>C3isgenerallyco nsideredtrue. conservationandenactdomesticmeasures.

Gv=GlobalValueoftheResourceConservationPpContributionpaidbyProducingCountriesCp=Cont ributionpaidbyConsumingCountries

22While theFigure1.19isbasedonthecoefficient=2,herethevalueissetat1.Thisisbecausetheini tialpointissetatzero,notnegative,inthiscase.Theelasticityofresourcerecoveryagainstcostisco nsideredlowerforthiscasethanthatofFigure1.19.

Box1.10illustratesthegameformatforthescenario2 Boxesfrom1.11to 1.13 representthecaseswiththesameconceptasillustratedintheprevious boxesfrom 1.3to1.5 Box1.14illustratestheformatforthescenario3 Boxesfrom1.15to 1.17 representthecaseswiththesameconceptasillustratedinthe previousboxesform1.3to1.5.

(million$) e=Costofenforcementbypenalty(eisappliedfornon- contributors)a =Costofenforcementbyselfarrangedarbitrator

Similarly,Box1.18showsthegameformatforscenario2bthatrepresentstheideacont ainedinBox1.6whereconsumers'contributionsaredirectlydisbursedtoproducers.Boxesfro m1.19to1.21,hereagain,representthecaseswiththesameconceptsasillustratedintheboxesfr om1.3to1.5.

Further,Box1.22showsthegameformatforscenario3bthatrepresentstheideacontai nedinBox1.6,andBoxesfrom1.23to1.25representthecaseswiththesameconceptsillustrated intheboxesfrom1.3to1.5.

Gv=Cp+Pp)&(Pv=GvPp+Cp)

Pv=0(Gv)-750(Pp)+750(Cp)=0II:

+1500(Cp)00III:Gv=0(Cp)+1500(Pp)00

Scenario3b(Gv=Cp+Pp1500)&(Pv=GvPp+Cp)

Variousgamesplayedaboveclearlyindicatedthatthebetterresultswouldbeachieved whenbothproducingandconsumingmembercountriesacceptthesimilarvaluesintheenviron mentalvaluesoftheenvironmentalresources.Thiscanbeachievedbypatientandfrequentcons ultationofpoliciesandexchangesofinformationbetweenproducersandconsumersunderthef rameworkofeachinternationalorganization.Betterappreciationofvaluesclaimedbyeachoth erwouldleadgamestoa success.Particularly,theemphasisshouldbeontheexistenceoffactor“ e”(enforcementofpenalties)and“a”(arbitrationsystem)Thesetwofactorsareproventobever yeffectiveunderthegameswhichimpliedthattheexchangeofinformationandpolicydialogue togetherwiththeself-established arbitrationsystemwouldleadtoasuccessfulconclusionofnegotiationswithintheactualintern ationalorganizations.Italsoimpliesthataproperlevelofpenaltiesleadtheorganizationscontri butionmanagementtoaneffectivelevel.Variousgamesplayedinthisthesisalsoillustratedthati tispossibletoreachcompromisingequilibriumbetweenconsumingandproducingmembers,a lthoughtheybecamepossibleonlyundercertainconditionsappliedforthegames.Thegamesal soillustratedthattransferoffundsfromconsumerstoproducerscouldcausefavorableeffects, whichshouldconstituteanimportantfactorintheframeworkofthisentirethesis.

5 Ifconsumerscontributetheentirefundandtransferittotheproducers,thegamesbec omeallsuccessfuloratleastnegotiable.However,thisisnota realisticsolutionbecauserespons ibilitiesneedtobesharedbythebothsidesundernormalcircumstances.

6 Whenthepenaltyischargedagainstfree- ridersandtheamountofthepenaltyislargeenoughtomakethe'non- contribute'solutionastheworstofallthechoices,thegamesallbecomesuccessful.This,howev er,maynotbecomeworkablewithouttheproperarbitrationsystemembeddedintherelatedinte rnationalagreements.

TradeAgreementsandEnvironmentalIssues

GlobalEnvironmentalIssues

ODAandEnvironmentalIssues

SustainableManagementofEnvironmentalNaturalResources

EnvironmentalConservationandInternationalAgreement

ExperiencesinOtherCountries

TheNewTradeDebateandItsImplicationtoVietnam

ApplicationofEconomicTheory- ImplicationofITTOMechanismstoVietnam-

ExperiencesinOtherCountriesforthecomparisonwithVietnam

Tiêu đề	The Role Of International Agreements In Environmental Conservation And Its Implication To Vietnam
Tác giả	Yasukata Fukahori
Người hướng dẫn	PTS. Phi Manh Hong, Dr. Phung Xuan Nha
Trường học	Vietnam National University
Chuyên ngành	Political Economy
Thể loại	Doctoral Philosophy Of Economics
Năm xuất bản	2008
Thành phố	Ha Noi

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