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VIETNAM NATIONAL UNIVERSITY FACULITY OF ECONOMIC YASUKATA FUKAHORI THE ROLE OF INTERNATIONAL AGREEMENTS IN ENVIRONMENTAL CONSERVATION AND ITS IMPLICATION TO VIETNAM Major Political Economy Code 62 31[.]
VIETNAM NATIONAL UNIVERSITY FACULITY OF ECONOMIC YASUKATA FUKAHORI THE ROLE OF INTERNATIONAL AGREEMENTS IN ENVIRONMENTAL CONSERVATION AND ITS IMPLICATION TO VIETNAM Major: Political Economy Code: 62.31.01.01 DOCTORAL PHILOSOPHY OF ECONOMICS Advisor: Associated Professor, Doctor Phi Manh Hong Doctor Phung Xuan Nha HaNoi, 2008 VIETNAM NATIONAL UNIVERSITY, HANOI COLLEGE OF ECONOMIC YASUKATA FUKAHORI THE ROLE OF INTERNATIONAL AGREEMENTS IN ENVIRONMENTAL CONSERVATION AND ITS IMPLICATION TO VIETNAM Major: Political Economy Code: 62.31.01.01 DOCTORAL PHILOSOPHY OF ECONOMICS Advisor: Associated Professor, Doctor Phi Manh Hong Doctor Phung Xuan Nha HaNoi, 2008 CONTENTS Page Introduction ……………………………………………………………………… Chapter I: Economic Theories Related to Environmental Conservation……… 14 1.1 Theories of Common Pool Resources …………………………………… 14 1.2 Theories of Collective Actions and International Agreements …………… 23 1.3 Coase Theorem ………………………………………………………… 25 1.4 Game Theory ……………………………………………………….…… 26 1.5 Other Economic Theories …………………………………………….… 31 1.6 Application of Economic Theories to Environmental Conservation……… 36 1.6.1 Sustainability and Budget Line – Case Study for Forest Conservation…… 36 1.6.2 Game theory scenarios and possible contribution arrangements of 46 international agreements ………………………………………….……… 1.7 Summary of Results ………………………………………………….…… 88 1.8 Recommendations …………………………………………………….… 90 Chapter II: Environmental Conservation in Relation with Trade, ODA and 92 Sustainable Development ………………………………………… …………… 2.1 2.1.1 2.1.2 2.1.3 2.2 2.2.1 2.2.2 2.3 2.3.1 2.3.2 2.3.3 Trade Agreements and Environmental Issues ………………………… … The New Politics of Trade ……………………………………… ……… Trade under Commodity Agreements and Environmental Conservation… WTO Dispute Settlement Mechanism and Environmental Conservation Global Environmental Issues ……….…………………………………… Issues and Problems related to Global Environmental Conservation……… World Summit for Environment ……………….………………………… ODA and Environmental Issues ………………………………………… Trade and ODA …………………………………….…………………… ODA and Environmental Issues …………………….…………………… Problem of International Aid …………………………….……………… 92 92 96 100 101 102 103 106 106 107 107 Private Sector …………………………………………………………… Transparency …………………………………………………….……… The Problem of Sovereignty and Economic Forces ……………………… Capacity Building, Education, and International Treaties ………….…… Sustainable Management of Environmental Natural Resources ……….… Definitions of Sustainable Development ………………………………… Economic growth for local welfare and conservation - Sustainable Development 2.4.3 Problems Causing Sustainable Management …………………… ……… 2.5 Environmental Conservation and International Agreement ……………… 2.5.1 International Negotiation on Environmental Conservation ……………… 2.5.2 Fund Raising under the Existing International Agreements ……………… 2.5.3 ITTO and Forest Conservation …………………………………………… 2.5.4 Limit in conservation by an international agreement organization ………… 2.6 Experiences in Other Countries…………………………………………… 2.6.1 Japan ……………………………………………………………………… 2.6.2 South Korea ……………………………………………………………… 2.6.3 China ……………………………………………………………………… Chapter III: Issues Related to Vietnam ………………………………………… 2.3.4 2.3.5 2.3.6 2.3.7 2.4 2.4.1 2.4.2 109 109 110 110 111 111 112 114 116 116 117 118 130 132 132 133 133 137 3.1 3.1.1 The New Trade Debate and Its Implication to Vietnam ………………… Vietnam’s New Membership of WTO …………………………………… 137 3.1.2 3.1.3 3.1.4 3.2 New Politics of Trade and Vietnam ……………………………………… CDM and Vietnam ……………………………………………………… ODA and Environment/Trade Issues for Vietnam………………………… Application of Economic Theory - Implication of ITTO Mechanisms to Vietnam - ………………………………………………………………… Scenario ………………………………………………………………… Scenario 2………………………………………………………………… Analysis of results ………………………………………………………… Summary of Games ……………………………………………………… Experiences in Other Countries for the comparison with Vietnam………… Japan ……………………………………………………………………… South Korea ………………………………………………………….…… China …………………………………………………………………… 138 139 141 142 3.2.1 3.2.2 3.2.3 3.2.4 3.3 3.2.1 3.2.2 3.2.3 137 144 151 156 157 160 160 160 160 3.2.4 Lessons from other countries …………………………………………… Conclusion ……………………………………………………………………… 161 List of reference materials ……………………………………………………… 168 162 LIST OF FIGURES, BOXES AND TABLES Page Chapter I: Economic Theories Related to Environmental Conservation 15 Figure 1.1 Supply=Demand Relation for Normal Private Goods 18 Figure 1.2 Supply=Demand Relation for Public Goods 18 Figure 1.3 Total Cost and Total Revenue Relation (Private goods) 20 Figure 1.4 Marginal Cost and Average Revenue Relation (Private Goods) Figure 1.5 Total Cost and Total Revenue Relation (Public Goods) 21 Figure 1.6 Marginal Cost and Average Revenue Relation (Public Goods) 21 Figure 1.7 Natural Resource Budget Line and Sustainable Level 23 Box 1.1 International Agreement and Game Theory 29 Figure 1.8 Contribution and Depletion Relation 30 Figure 1.9 Export Quota Allocation and Market 34 Figure 1.10 Elasticity of Substitution (High Elasticity) 35 Figure 1.11 Elasticity of Substitution (Low Elasticity) 35 Figure 1.12 Current and Possible Future Budget Lines 37 Figure 1.13 Long-term Tropical Forests Depletion Perspectives 38 Figure 1.14 The case sustainable level is set at 2000 41 Figure 1.15 The case sustainable level is much higher than present level 41 Figure 1.16 Contribution and Sustainable Level of Resource Depletion (Case 1) Contribution and Sustainable Level of Resource Depletion (Case 2) Contribution and Sustainable Level of Resource Depletion (Case 3) Relation between Fund and Global Environmental Value / Scenario (Gv = 2*(Cp + Pp) - 1500) Contribution to the Fund and Game Theory /Scenario (Gv = 2(Cp + Pp) - 1500) 44 Figure 1.17 Figure 1.18 Figure 1.19 Box 1.2 20 44 45 48 49 Box 1.3 Same environmental value for both consumers and producers 53 Box 1.4 No environmental value for producers 54 Box 1.5 Half environmental value for producers 55 Box 1.6 57 Box 1.7 Contribution to the fund and Game Theory /Scenario 1b (Gv = 2(Cp + Pp) - 1500)&(Pv = Gv - Pp + Cp) Same environmental value for both consumers and producers Box 1.8 No environmental value for producers 60 Box 1.9 Half environmental value for producers 61 Figure 1.20 63 Figure 1.21 Contribution and Sustainable Level of Depletion (Case 4: Both consumers and producers share responsibility) Budget Line of the Fund Figure 1.22 Budget Line Shift by Producers' Efforts 66 Figure 1.23 68 Box 1.11 Relation between contribution and Global Environmental Value /Scenario (Gv = Cp + Pp) Relation between contribution and Global Environmental Value /Scenario (Gv = Cp + Pp -1500) Contribution to the fund and Game Theory /Scenario (Gv = Cp + Pp) Same environmental value for both consumers and producers Box 1.12 No environmental value for producers 73 Box 1.13 Half environmental value for producers 74 Box 1.14 75 Box 1.15 Contribution to the fund and Game Theory /Scenario (Gv = Cp + Pp -1500) Same environmental value for both consumers and producers Box 1.16 No environmental value for producers 77 Box 1.17 Half environmental value for producers 78 Box 1.18 80 Box 1.19 Contribution to the fund and Game Theory /Scenario 2b (Gv = Cp + Pp)&(Pv = Gv -Pp + Cp) Same environmental value for both consumers and producers Box 1.20 No environmental value for producers 82 Box 1.21 Half environmental value for producers 83 Figure 1.24 Box 1.10 59 66 69 71 72 76 81 Box 1.22 84 Box 1.23 Contribution to the fund and Game Theory /Scenario 3b (Gv = Cp + Pp -1500)&(Pv = Gv - Pp + Cp) Same environmental value for both consumers and producers Box 1.24 No environmental value for producers 86 Box 1.25 Half environmental value for producers 87 Chapter II: Environmental Conservation and Trade ……………… 92 Table 2.1 Developing Countries' Share in Total Exports of Selected 99 Table 2.2 Total forest area, related land area and population in 1995 120 Table 2.3 Forest cover change for developing countries 123 Table 2.4 Current and projected consumption of forest products (1990-2010) Natural forest and Net Plantations in developing countries 124 Forest cover state and change by ecological zone for tropical countries Chapter III: Issues Related to Vietnam ……………………………… 126 Table 2.5 Table 2.6 85 125 132 Box 3.2 Relation between the Bali Partnership Fund and Vietnam Scenario (GVv = Cp + Vp) Contribution to the Bali Partnership Fund and Game Theory / Scenario 1: Vietam (GVv = Cp + Vp) Same environmental value for both Vietnam and consumers Box 3.3 No environmental value for Vietnam 149 Box 3.4 Half environmental value for Vietnam 150 Box 3.5 152 Box 3.6 Contribution to the Bali Partnership Fund and Game Theory /Scenario 2: Vietnam (GVv = Cp + Vp)&(Vv = GVv -Vp + Cp) Same environmental value for both Vietnam and consumers Box 3.7 No environmental value for Vietnam 154 Box 3.8 No environmental value for Vietnam 155 Figure 3.1 Box 3.1 146 147 148 153 Abbreviations AFTA ASEAN Free Trade Area APEC Asia Pacific Economic Cooperation ARF ASEAN Regional Forum ASEAN Association of East Asian Nations ASEM Asia Europe Meeting BTA Bilateral Trade Agreement CDM Clean Development Mechanism CEPT Common Effective Preferential Tariff COP Conference of the Parties CPR Common Pool Resource CPRGS Comprehensive Poverty Reduction and Growth Strategy DDA Doha Development Agenda DSB Dispute Settlement Board FAO Food and Agriculture Organization FCCC Framework Convention on the Climate Change FTA Free Trade Agreement FTAA Free Trade Area of the Americas GATS General Agreement on Trade in Services GATT General Agreement on Tariffs and Trade GEF General Environmental Facilities GHG Green House Gas ICO International Coffee Organization IMF International Monetary Fund IPCC Inter-Governmental Panel on Climate Change ITTA International Tropical Timber Agreement ITTO International Tropical Timber Organization MAI Multilateral Agreement on Investment MDG Millennium Development Goals MEA Multilateral Environment Agreement MMT Methylcyclopentadienyl Manganese Tricarbonyl NAFTA North American Free Trade Agreement NGO Non-Governmental Organization ODA Official Development Aid OECD Organization for Economic Cooperation and Development PRSP Poverty Reduction Strategy Paper SOE State Owned Enterprise TED Turtle Excluder Device TPA Trade Promotion Authority UN United Nations UNCED United Nations Conference on Environment and Development UNDP United Nations Development Programme UNEP United Nations Environmental Programme USITC United States International Trade Commission WB World Bank WCED World Commission on Environment and Development WSSD World Summit on Sustainable Development WTO WWF Trade Organization World Wildlife Fund ... theories and analyze the international agreements in accordance with these theories By adopting theoretical approaches, the role and limits of international agreements in the environmental conservation. .. original and very challenging in this aspect Objectives of the Study Thus, the purpose of this thesis is to examine how International Agreements envisage to contributing to conservation of the. .. adjusting its trade policies under WTO agreements Method of Study The final conclusion of the proposed thesis will be whether the mechanisms of international agreements are proved to be in line