a. Environmental taxes imposed by a supranational body

An international environmental tax (IET) may be imposed either by (a) a sovereign or nonsovereign international body, or (b) national governments acting under an international agreement. An IET imposed by a “sovereign” supranational body would possess the advantage of a direct correspondence between the political authority to levy the tax and the geographical zone of the externalities. However, as observed above, the extreme reluctance of nations to reassign sovereign authority to a supranational entity makes the discussion of such a tax academic, except for benchmark reasons. Thus, politically speaking, the only realistic possibility for the imposition of an IET by a supranational body is one levied by a “nonsovereign” polity utilizing delegated sovereignty received under an international environmental agreement.

Once such an approach to international environmental taxation is agreed upon, a number of other issues arise concerning its structure. While any major tax base could be used, a sales tax base—especially of the narrow-based or excise variety—would generally be less obtrusive on the domain of national governments than taxes more directly linked to fundamental economic power in the form of income and wealth. Also, an excise tax possesses the advantage of directly entering the price system, thus changing relative prices and making it an ideal economic incentive (market-based) instrument for the abatement of negative environmental externalities.

In addition, the question arises whether a nonsovereign supranational taxing body should possess vertically integrated taxation authority under its delegated powers, inclusive of its own collection and enforcement system, or whether it should utilize existing national tax administration systems. The latter option would be more palatable to nations since it would represent a lesser delegation of national sovereignty to the supranational body. This approach would still permit the central taxing polity to exert varying degrees of administrative influence over the harmonization of the multinational tax collecting mechanism. An important additional question arises pertaining to the use of the tax revenues. Would any or all of the revenues be spent by the supranational taxing body or, instead, would some or all be returned to the nation of tax base origin?

b. Internationally harmonized national environmental taxes

An alternative form of IET would rely upon the internationally coordinated imposition of taxes by the nations signatory to an international agreement. The agreement would mandate the use of a certain type of tax and, in addition, certain tax base and tax rate features would be harmonized across the domestic taxes imposed by the individual nations. Harmonization of the tax would be necessary in order to precisely internalize the environmental externalities as well as to discourage free-rider behavior and treaty noncompliance. The tax would involve a lower order delegation of sovereignty than an IET imposed by a nonsovereign supranational body and, thus, would be more acceptable politically to individual nations.

Although home-nation retention of the revenues collected under such a tax would seem logical, to do so may conflict with the international objectives at hand. Thus, it may be necessary for the treaty to specify that part or all of the revenues collected from nationally imposed taxes be earmarked for international environmental uses, as implemented through a supranational body created under the treaty. Moreover, even if the taxing nation is allowed to keep some or all of the IET revenues, the treaty may need to specify that the funds be used for designated environmental purposes.

Any major type of tax base could be utilized, just as with an IET imposed by a supranational body, with the most likely candidate again being an excise tax due to its economic incentive features as well as its relative detachment from the income and wealth tax bases of a nation. In addition, an excise tax is conducive to earmarking for trust funds and financial transfers.

c. Cost sharing

The understandable reluctance of nations to delegate the jealously guarded “power to tax” to a supranational body, or even agreeing to internationally harmonized domestic environmental taxes, has resulted in the dominant use of cost sharing in existing international environmental agreements as well as in the financing of international organizations such as the United Nations. Cost sharing, also known as burden sharing, lacks the automaticity of a conventional tax. There is no direct use of a conventional tax base, that is, income, wealth, or market transactions. Instead, it is a “voluntary” contribution made by nations signatory to an international agreement. Even though revenue/tax assignments may be assessed as obligations to each nation via a formula authorized under the agreement, as is true in the more refined cost-sharing cases, the fact remains that a nation has “voluntarily” participated in the agreement. Moreover, the enforcement of cost-share payments is normally lax and, as a result, nations frequently delay, or avoid, their contributions.

Meanwhile, the question may be raised whether cost sharing actually constitutes a “tax.” If one defines a tax as the direct payment of revenues by a private sector consumer or business to government, the answer would be “no.” ^19/ However, cost sharing may be viewed as a tax in another context, namely, a tax imposed directly by governments upon governments. The agreement calls for cost shares to be assessed to each nation which, in effect, become taxes paid by those nations signatory to the agreement. The nation pays an international tax—its cost share—but then proceeds to impose national taxes upon its private sector to finance the cost share.^20/

At best, however, cost sharing is an unsophisticated method of taxation, especially when an assessment formula is not prescribed and/or enforced. Revenue stability under the cost-sharing approach leaves much to be desired. Often, the international programs financed via this instrument are replenished on a sporadic basis, subject to the political whims and macroeconomic conditions of signatory nations. Also, it possesses the characteristics of a general rather than a specific tax and, as such, cannot be directly linked to those economic activities which generate environmental externalities. Thus, unlike an IET of the excise variety imposed either by a supranational body or harmonized across nations, cost sharing cannot be used to change relative prices so as to internalize environmental externalities into market prices. Nonetheless, cost-sharing, revenues can be earmarked for particular international environmental expenditures or trust funds. Moreover, the ability-to-pay norm of equity in the distribution of tax burdens can be applied to cost sharing. For example, the assessment formula can assign burden shares in a “progressive” manner reflecting national per capita income or GDP differentials.

Overall, the present use of international environmental tax and fiscal instruments in IEAs is limited and unsophisticated. There exist upward of 150 such agreements, many of which have no specific financial provisions. The discussion below describes several of the most important and interesting contemporary examples of international environmental taxation.

a. Global Environment Facility (GEF)

The GEF was established in 1990 after being endorsed at a Development Committee meeting of the World Bank and International Monetary Fund. The idea had been proposed during the previous year by France and supported by Germany. Although it constitutes a form of international environmental agreement, GEF does not directly emerge from a convention or treaty. The four policy areas of GEF encompass part, but not all, of the global commons. These are: global warming, ozone depletion, international waters or oceans, and the preservation of biological diversity (biodiversity). It utilizes the trust fund concept for providing financial assistance to developing nations for specific projects within these four environmental categories.

GEF is jointly administered by the World Bank, UNDP, and UNEP. It is presently operating on an interim three-year basis for the period 1991-93. The initial funding for this period amounts to US$1.36 billion: US$860 million in the Global Environment Trust Fund (GET), known as the “core fund”; US$300 million in co-financing arrangements, and US$200 million administered in cooperation with the Multilateral Fund for ozone policy under the Montreal Protocol. ^21/ As of June 1992, 28 nations (11 of them developing nations) had pledged contributions to GET. ^22/ Contributions are currently made on a strictly voluntary basis without the use of a formula for assigning burden shares.

b. Multilateral Fund [Montreal Protocol]

The Multilateral Fund (MF) was adopted in November 1990 as part of the London amendment to the Montreal Protocol to help abate ozone pollution. ^23/ Established on an interim three-year basis for the period 1991-93, it provides financial assistance, in addition to the technological assistance required under the Protocol, to developing nations to assist them in attaining economic development paths which are not reliant upon chlorofluorocarbons (CFCs) and other chemicals known to deplete the stratospheric ozone layer. These transfers have helped to encourage developing nations to become party to the Protocol. ^24/

MF is financed through voluntary contributions made by industrial nations signatory to the Protocol. The United Nations standard assessment scale is used to determine these cost shares. MF is administered by an Executive Committee consisting of seven industrial nations and seven developing nations, using a “double majority voting rule” requiring a two thirds majority approval by both the industrial and developing nation categories in order for a motion to pass if a consensus has not been reached. ^25/ Initial funding is set at US$160 million over the three-year period, with an increase to US$240 million if both China and India become party to the Protocol (US$40 million increment for each nation). To this point, China has acceded while India has not, thus placing the current fund total at US$200 million.

c. World Heritage Fund

The World Heritage Fund (WHF), officially known as the “Fund for the Protection of the World Cultural and Natural Heritage,” was established by the World Heritage Convention in 1972. ^26/ The international environmental aspects of WHF derive from its goal of preserving the natural environment in terms of the “unidirectional” externalities which emanate from the unique natural resource endowment of a particular nation to the benefit of other nations. It consists of a trust fund financed largely by contributions from convention signatories. The trust fund concept, as applied in this case, implies a permanent funding arrangement intended to provide revenue stability via a replenishment every second year. ^27/

A cost-sharing formula is used to assess burden shares. This assessment is set equally for all nations as a flat percentage, not to exceed 1 percent, of each nation’s contribution to the regular budget of UNESCO. Hence, the cost-sharing formula used by UNESCO generally sets the pattern of WHF contributions. Also, this funding arrangement means that low-income nations contribute something to WHF, but that high income nations provide most of its financing. ^28/ In addition, both joint nation and nation specific benefits are recognized in WHF since the nation receiving financial assistance is expected, if possible, to pay a substantial share of the costs of a project. WHF revenues are used for a variety of activities including research studies, the supplying of technical experts, low-interest or interest-free loans, and financial transfers.

d. General Trust Fund [Long-Range Transboundary Air Pollution]

A 1984 protocol to the Convention on Long-Range Transboundary Air Pollution in Europe creates a General Trust Fund (GTF) for the long-term financing of the cooperative program for the monitoring and evaluation of such pollution. ^29/ Unlike the GEF and the MF which are concerned primarily with environmental problems related to the global commons, the GTF is concerned with regional transnational air pollution in Europe. Cost sharing is used to provide revenues to the fund, with burden shares assigned on the basis of the United Nations assessment schedule. The contributions, which are mandatory for signatories to the convention, are made on an annual basis.

e. International Oil Pollution Compensation Fund

The International Oil Pollution Compensation Fund (IOPCF) was established under a 1971 treaty to provide compensation for the victims of oil spills in international waters. ^30/ Contributions to the fund are paid directly by companies or persons on the basis of a specified sum for each ton of oil ^31/ imported into a signatory nation during a calendar year. These payments are made in two stages: first, an initial contribution when a nation becomes party to the treaty and, second, periodic replenishment contributions. IOPCF thus is financed by a de facto excise tax on oil imports, with revenues “earmarked” for trust fund use in accordance with compensation rules for oil pollution damage. Such an arrangement contains features of both Pigovian taxation and fiscal federalism policy as applied “within” nations.

f. Taxation of seabed and other minerals

Interesting examples of international environmental taxation may also be found in several treaties associated with the exploitation of minerals in the global commons. One of these pertains to the taxation of seabed mining by the International Seabed Authority (ISA), a nonsovereign supranational body created under the law of the sea treaty. ^32/ To date, however, no mining has occurred. The treaty provides for both conventional monetary taxation as well as taxation in kind. ^33/ These taxes would be imposed upon private and state mining firms operating as one component of the “parallel mining system” established by the treaty, the other component being the mining arm of ISA known as “The Enterprise.”

One monetary tax, in effect, is a user fee paid by private and state enterprises to cover the administrative costs of processing applications for the authorization to mine. The other, more fundamental, monetary tax comes in two variations, either one of which may be selected at the discretion of the mining company: (1) the payment of a production tax assessed as a fixed percentage of the market value of mining output, or (2) the combination of such a production excise tax and a proportion of the net proceeds (net income) derived from the mining output.

One in-kind tax is the mandatory provision of a prospected nodule site by each private/state mining applicant to the ISA for possible use by The Enterprise. Additional in-kind taxes come in the form of mandatory prospecting services to be provided to The Enterprise in conjunction with each mining application and a controversial, quasi-mandatory transfer of mining technology from private/state mining firms to The Enterprise.

Another international mining convention containing taxation provisions is the Svalbard Islands Treaty, a treaty relevant initially to the mining of coal, but later oil, in this archipelago in the Arctic Ocean off Norway. ^34/ The six-nation treaty grants sovereignty over the islands to Norway, but then tempers this sovereignty by stipulating that taxes and duties collected in Svalbard must be used only in Svalbard and, in addition, that such taxes must only be as high as necessary to cover the costs of administering the islands. ^35/ In addition, the Convention on the Regulation of Antarctic Mineral Resource Activities adopted in 1988 as part of the Antarctic Treaty System but unlikely to be ratified due to subsequent events, ^36/ contains explicit provisions calling for fees and levies related to possible minerals development in Antarctica. ^37/

Thus, it has been observed that certain environmental tax, trust fund, and financial transfer provisions are used in existing IEAs. These are generally of an unsophisticated nature, with the most prevalent form of international environmental taxation being the loose-knit, essentially voluntary, cost-sharing method of finance. The final section of the paper will examine certain proposals for more sophisticated international environmental taxation.

a. The nature of an international carbon tax

A “possible” venue for the introduction of an international carbon tax (ICT) would be the climate convention recently adopted at the UNCED conference in Rio de Janeiro. ^38/ An ICT is an economic incentive instrument designed to increase the prices of carbon emitting fossil fuels ^39/ (coal, oil, natural gas), so as to encourage their more efficient use, while encouraging the substitution of nonfossil fuels (geothermal, nuclear, ^40/ solar, water, wind power) as energy sources. ^41/ It would enter the prices of fossil fuels in an excise tax format. An ICT imposed on the consumption of fossil fuels would be compatible with the destination principle of GATT ^42/ and would provide the desired increase in world fossil fuel prices. Marginal tax rates would vary in accordance with the carbon content of each fossil fuel. ^43/ These tax rates should be uniform across nations ^44/ since the global warming problem is associated with the entire global atmosphere. Tax rates would be set in relationship to the carbon abatement targets reached in an international agreement and could be adjusted as the level of scientific information increases.

Although an international carbon tax possessing these characteristics would internalize carbon emission externalities in an efficient manner, significant distributional effects would accompany the adoption of such a tax. There will inevitably be winners and losers in the international carbon tax game. However, since successful international cooperation is a positive-sum game, ^45/ there will be net welfare gains from which side payments could be made to losers to induce their cooperation. ^46/ Moreover, there are a number of other dimensions to the distributional issue. For example, carbon tax burdens, both total and per capita, will vary across nations; the macroeconomic effects of the tax on GDP will vary across nations; the industrial nations are responsible for a large percentage of carbon emissions, ^47/ and the developing nations own most rain forests. Meanwhile, the manner in which ICT revenues are distributed will bear importantly upon the success of any policy regime that reconciles the efficiency and equity dimensions of the tax.

b. Alternative international carbon tax regimes

At what level of government—supranational or national—should an international carbon tax be imposed? The only politically viable basis for a tax imposed at the supranational level, as observed above, would be through the delegation of sovereignty to a nonsovereign supranational body rather than via the creation of a sovereign supranational body. Meanwhile, since nonharmonized national carbon taxes would invite a “free-riders’ nightmare,” this type of ICT regime is rejected. However, an ICT imposed by national governments, using a tax base and rate structure that is “harmonized” across nations through a tightly coupled treaty, could more effectively address the free-rider problem. Thus, we are left with two choices: (1) an ICT imposed by a nonsovereign supranational body, or (2) an ICT imposed by national governments in an internationally harmonized manner.

An adjunct to the question of whether the tax should be imposed at the supranational or national level is the matter of who would administer and collect the tax. A tax imposed by a nonsovereign supranational body would not necessarily require that body to have its own tax administration system. Instead, existing national government systems could play a major role in tax collection and enforcement, as coordinated through the supranational body. Hence, the argument that an ICT imposed by a supranational entity would create a large new international bureaucracy needs to be tempered. Generally speaking, however, the level of tax imposition is more important than the level of tax administration. Moreover, even if the tax administration question should be answered via an internationally harmonized national ICT, thus further defusing the international bureaucracy point, the critical question of how to use the tax revenues would still remain.

The following revenue distribution approaches, the first two of which are polar opposites, may be considered:

1. The revenues derived from an ICT imposed by a nonsovereign supranational body would be earmarked for an international carbon tax trust fund. These revenues, in turn, would be used for financial transfers, including side payments, ^48/ and other expenditures linked to both the carbon abatement and distributional objectives.

2. The national governments imposing an internationally harmonized ICT would retain the revenues from the taxes which they impose, without restrictions as to use. Nonetheless, even in this case, depending upon whether the treaty designated, nationally imposed tax is levied on the production of fossil fuels or at the point of energy consumption, distributional patterns may vary considerably between nations. ^49/

3. Some combination of the above two approaches, whereby either (a) the supranational taxing authority would return some ICT revenues to the nation of revenue origin, keeping the remainder for trust fund use, or (b) the nations imposing a harmonized ICT would provide some portion of the revenues to the supranational body for trust fund use, while keeping the remainder for themselves.

A closer look at these revenue-distribution choices suggests that the second alternative, unrestricted national government retention of the funds, would badly miss the equity goal since none of the revenues would be available for treaty negotiated distributional goals including possible side payments between winners and losers. There would be no international institutional mechanism to coordinate the efficiency and equity dimensions of the agreement. This problem would be avoided under alternative one (supranational retention of all revenues) and alternative three (supranational retention/receipt of some revenues). In the latter case, however, additional international coordination may be required in order to reconcile that portion of ICT revenues left in the hands of a nation with the overall treaty objectives.

In sum, the efficiency goal of an ICT regime can be met through either a supranationally imposed tax or by harmonized national carbon taxes. Yet, attainment of the equity goal will require, in addition, an international body or mechanism to manage the distribution of ICT revenues.

The above policy scenario fits the mold of traditional “fiscal federalism.” That is, an international carbon excise tax would be earmarked for an international trust fund in accordance with the benefit principle of taxation. In turn, the trust fund revenues would be used to finance a variety of expenditures and transfers linked to the nature of the tax and the goals of the sponsoring treaty. For example, some of the revenues could be used for payments to developing nations for conserving rain forests (see Figure 2 above). Accordingly, the carbon excise tax would internalize the negative externality (carbon emissions) while the financial transfer would internalize the positive externality (the use of rain forests as carbon sinks). ^50/ In addition, some revenues could be used for transfers from high carbon emitting to low carbon emitting nations based upon a distributional criterion, or to finance subsidies for the development of nonfossil fuel energy sources.

An interesting alternative to the direct imposition of an international carbon excise tax to alleviate global warming has been suggested by Hoel. ^51/ Under his proposal, each nation would be assessed a per unit tax on its carbon emissions by an international agency created under a treaty, the payments being made directly by the central government of the nation to the agency. In effect, this amounts to a sophisticated form of cost sharing with each nation’s assessment linked to the total volume of its carbon emissions. Moreover, it constitutes an “implicit” excise tax on carbon emissions.

This assessment/implicit excise tax on carbon emissions would be uniform across nations. The tax period could be one or several years. A set of treaty negotiated reimbursement rules (distributional criteria) would be applied. A nation would be debited for its cost share on the basis of its CO₂ emissions and would be credited for its reimbursement share from total cost-share revenues depending upon its eligibility under the reimbursement rules. Thus, it could either receive net payments from the fund, make net payments to the fund, or come out even. The fund itself would be in balance at all times (except for administrative costs).

Hoel argues that such an approach would avoid a large and costly international bureaucracy, as compared to a supranational tax, while reducing the potential for free-rider behavior that would accompany nationally imposed ICTs. He suggests that a rational nation would select a carbon emissions level so that the sum of carbon taxes paid to the international agency (its cost share) and its domestic costs of reducing carbon emissions are minimized.

However, it is doubtful that such a cost-sharing/implicit carbon tax regime would be superior to those regimes described above that would directly impose a carbon excise tax on the private sector. For example, it would not avoid a substantial international institutional framework for the functioning of its assessment and reimbursement scheme. Moreover, an ICT imposed by a supranational government, but utilizing existing national government systems of tax administration, might not entail any greater “international bureaucracy” than would the Hoel proposal. Furthermore, free-rider behavior need not be a prohibitive problem under a harmonized nationally imposed ICT if the treaty mechanism is “tightly coupled.”

Most importantly, however, the cost-sharing aspects of the Hoel proposal appear to render it inferior to those ICT variants that directly impose a carbon excise tax since there is no guarantee that a national government would, in fact, impose equivalent domestic carbon excise taxes to raise its burden share. Until this step is taken, the “implicit” carbon excise tax does not become an “actual” carbon excise tax. If national governments do not act rationally, which is very possible given political pressures from fossil fuel industries and other negatively impacted economic interests, “nonexcise” tax sources may be used to finance part or all of the assessment share. To the extent this may occur, cost sharing would not change the relative prices of fossil fuels—unlike the carbon tax which is an excise tax that directly enters the prices of such fuels.

In sum, an appropriately designed international carbon excise tax can efficiently abate carbon emissions in accordance with a particular abatement target. Unquestionably, however, there are many political obstacles to bringing about an ICT regime, not the least of which relate to its complex distributional dimensions. Meanwhile, what about the other global commons? What sort of an international environmental tax and fiscal regime might be recommended for providing an efficient and equitable use of the global commons as a whole?

a. The global commons trust fund concept

The specific global commons may be identified as the atmosphere, oceans, space, biological diversity and, perhaps, Antarctica. ^52/ The most visible aspects of the utilization of the atmospheric commons are the ozone layer and carbon balance that are under threat from industrial age activities. There are several relevant economic aspects of the oceanic commons, including fishing and transportation in international waters, mining for deep seabed minerals, and the use of the oceans as dumping grounds for toxic and other wastes. The space commons include the geostationary orbit for satellites, travel and space stations in outer space, and the electromagnetic radio spectrum. Biological diversity encompasses the earth’s large and diverse number of living animal and plant species and the ecological relationship of these to the planet as a whole. Finally, if Antarctica is to be counted as a global commons, it would be primarily due to its significant scientific linkage to global climates and ocean levels.

The policy challenge at hand is how to achieve an efficient economic use of these commons in the absence of explicit national or international sovereignty (property rights). Even though the commons have economic value. it is difficult to price this value in the absence of such rights. In order to overcome this obstacle, it has been suggested that a global commons trust fund be established, using delegated national sovereignty under an international agreement, that would utilize international tax and fiscal instruments for the efficient use of the global commons. ^53/ Taxes or charges would be imposed on access to the commons, with revenues earmarked for an environmental trust fund whose expenditures would help restore the commons from past damage and help develop technologies that would make the future use of the commons more efficient. The proposed taxes would be levied upon such uses of the commons as the annual world harvest of fish, offshore oil and gas production, the use of the oceans as dumping sites for wastes, carbon emissions (a form of “carbon excise tax”), ozone depleting CFCs and related gases, the mining of seabed minerals (currently provided for in the law of the sea treaty), and the various uses of space such as parking fees for geostationary communications satellites. ^54/ Such taxes/charges could be justified via the benefit principle of taxation. ^55/

b. The current state of global commons policy

Considering the atmosphere, it may be observed that no explicit national property rights exist to the atmosphere as such, though certain developing nations do hold property rights to rain forests which are an integral part of atmospheric carbon balance. The Montreal Protocol and the recent climate treaty do take small steps toward an “implicit” res communis (all nations “co-own” the atmosphere) property rights criterion by providing a framework for global policies intended to protect the atmosphere from ozone depletion and global warming, respectively. Present policy under these conventions largely follows a regulatory, command and control, approach. However, the Montreal Protocol uses, and the climate treaty plans to use, an integrated cost-sharing, trust fund, financial transfer mechanism to help abate ozone pollution. Moreover, if an international carbon tax should be adopted, it would put a price on access to the global atmosphere in the form of carbon emissions.

In terms of the oceans, there is no assignment of sovereignty to regulate fishing on the high seas. However, fishing in coastal waters (exclusive economic zones) is controlled by coastal states under authority granted by the law of the sea treaty. ^56/ Also, that treaty provides a loose form of res communis or global property rights to the mining of the deep seabed. Moreover, there is recognition of the property rights of victims “not to incur damage” (negative externalities) under the International Oil Pollution Compensation Fund (IOPCF) and certain other ocean pollution treaties. ^57/ In effect, these conventions recognize the “polluter pays principle.” Meanwhile, there are no international taxes nor charges for fishing nor for passenger and freight transportation in international waters, but there are for deep seabed mining. In addition, IOPCF uses a de facto excise tax as a financing instrument.

Regarding the space commons, the outer space treaties of 1967 and 1979 provide a weak application of the res communis property rights tenet to outer space, but fail to back this up with meaningful implementing institutions or policies. For example, there are no restrictions nor charges for access to outer space. However, there are some access restrictions, but no charges, for use of the geostationary orbit by communications satellites and the situation is similar for access to the electromagnetic radio spectrum. ^58/

Turning to biological diversity, the recent convention signed in Rio de Janeiro provides a framework for recognizing national property rights to biological resources as well as an overall global interest in the preservation of biodiversity. The convention also provides a basis for the future introduction of an integrated cost-sharing, trust fund, financial transfer policy approach. Meanwhile, a joint industrial and developing nation biotechnology industry is beginning to emerge which links the preservation of biological resources to the profit motive.

In the case of Antarctica, the Antarctic Treaty ^59/ provides what amounts to a global trust regime for the continent. It imposes a moratorium on claims to sovereignty in Antarctica by individual nations and, in general, manages the resources of the continent under the affiliated Antarctic Treaty System. A command and control approach is used for this purpose, though a 1988 convention formulated a regulatory framework for mining that includes taxes and charges. ^60/ However, this treaty was sidetracked by a recent protocol to the Antarctic Treaty that imposes a de facto 50-year mining ban in the Antarctic as well as other resource conservation measures. ^61/

c. The role of the Global Environment Facility (GEF)

Given this “less than comprehensive” contemporary approach to global commons policy, the question of possible future policy takes on considerable significance. In this regard, it would appear that the GEF is in a favorable position to play a useful role. The policy areas of GEF, for example, encompass several of the global commons. The ozone and global warming problems, the centerpiece problem areas of current global atmospheric policy, are among these policy areas. GEF also devotes policy attention to biological diversity and to the oceans. In addition, it is in the process of adding land degradation, primarily desertification and deforestation, as a subsidiary area. ^62/

Moreover, as observed above, GEF is helping to administer the MF for ozone policy and, in addition, it has been included in the climate convention as the international entity entrusted with the operation of the financial mechanism (on an interim basis) under that treaty. ^63/ Furthermore, it has been designated for a similar role in the biological diversity convention. ^64/ However, GEF is not specifically linked to the law of the sea treaty in relationship to seabed mining nor in other ways, nor to any other functional economic areas of the oceanic commons such as fishing, transportation, or the disposal of wastes. Also, it is not associated with the space commons. Yet, the door has been left open for possible future linkage to these other global commons in the following statement of principle: “The GEF is available to function as the funding mechanism for agreed global environmental conventions, should the parties to those conventions so desire.” ^65/

GEF advocates the use of a single unitary funding mechanism in terms of efficiency in mobilizing resources. ^66/ Relatedly, it advocates predictability in the flow of funds through contributions from industrial nations and other nations in a position to do so, thus suggesting the need for more permanent revenue sources such as through a sophisticated form of cost sharing. GEF envisions that if a “single unitary funding mechanism” were established, it would be replenished periodically, possibly every three years, through a single replenishment process. Meanwhile, the Sustainable Development Commission created by the UNCED (Rio de Janeiro) Conference to help implement its objectives will interact with GEF in the pursuit of these goals.