Embedded Files
Helpful prior knowledge and learning objectives
Helpful prior knowledge and learning objectives
Helpful prior learning:
Section 1.1.1 The economy and you, which explains what an economy is and how it is relevant to students’ lives
Section 1.1.2 The embedded economy, which explains the relationship between the economy and society and Earth’s systems
Section 1.2.7 Planetary boundaries, which explains the nine ecological systems that regulate conditions on Earth and their limits, seven of which we are exceeding
Section 1.3.9 Power in the economy, which explains where power comes from and how it shapes economic relationships
Section 4.1.1 Commons as a system, which explains the parts, relationships, and functions of the commons and the relationship between the commons and other provisioning institutions
Section 4.1.4 Designing commons, which explains Elinor Ostrom’s eight patterns for designing commons
Section 7.1.1 Global exchange as a system, which describes global exchange as a system with parts, relationships, functions and emergence
Section 7.1.2 History of global exchanges, which describes how global exchange systems have evolved over time, shaped by changes in technology, power, and environmental factors
Section 7.1.3 What moves across borders? which describes what flows across borders and explains how visible global flows are linked to less visible social and ecological effects
Section 7.2.1 Why do countries trade and restrict trade? which describes different forms of protectionism and explains arguments for and against freer trade
Section 7.2.5 Who writes the rules of global exchange? which explain who shapes the rules of global exchange and how various sources of power influence which rules are written and whose interests they reflect
Section 7.3.1 Unequal global value exchange, which explains how unequal prices and unequal wages systematically transfer value from periphery countries to core countries
Section 7.3.8 Foreign aid: flows, conditions, and limits, which explains how development aid can affect the sovereignty, institutions, and debt of receiving countries, and disucsses whose interests it primarily serves
Section S.1 What are systems?, which explains what a system is, the importance of systems boundaries, the difference between open and closed systems, and the importance of systems thinking
Section S.2 Systems thinking patterns, which outlines the core components of systems thinking: distinctions (thing/other), systems (part/whole), relationships (action/reaction), and perspectives (point/view)
Learning objectives:
explain why governing shared ecological systems at large scales is more difficult than governing local commons, including the concepts of collective action problems, free-rider problems, power asymmetry, and state capture
evaluate the effectiveness of international and regional approaches to governing shared ecological systems
For generations, the Ogiek people of the Maasai Mau Forest in Kenya governed their forest through a system of shared rules. Different areas were set aside for hunting, farming, or leaving undisturbed. Decisions about land use were made collectively, based on knowledge built up over centuries. The forest remained largely intact.
The Ogiek's experience is not unusual. Across Africa, forests managed by indigenous communities have kept more of their tree cover than forests under formal state protection.
If the Ogiek's system of governing the Maasai Mau Forest is working, why don’t we do something similar for global shared resources like the atmosphere? This section looks at how states, regions, and communities have tried to answer that question, and how much unequal global power still stands in the way.
Figure 1. Ogiek Peoples of Kenya in a peaceful demonstration demanding for their land rights
(Credit: Queen Asali via Wikipedia, CC BY-SA 4.0)
Why is governing shared ecological systems so difficult?
Why is governing shared ecological systems so difficult?
Topic 4 established that a commons has three essential elements: a resource, a community of people who share and depend on the resource, and a set of rules the community has created together to manage the use of the resource. When all three elements are in place, as the Ogiek case above illustrates, commons governance can be effective and long-lasting.
The conditions that make commons governance work are achievable at local and regional scales. They become progressively harder to establish as the geographic scale of the shared system grows. A river basin shared by three countries is more difficult to govern than a forest managed by one community. The global atmosphere, shared by every person and every ecosystem on Earth, presents the hardest governance problem of all. The community is all of humanity, the rules would need to be agreed by nearly two hundred sovereign states, and there is no authority with the power to enforce them.
Figure 2. Commons consist of three elements: the resource, the community, and the rules
(Credit: Heinrich Böll Foundation, CC BY-SA 4.0)
Governing any shared resource involves what economists call collective action problems. Situations where what serves each agent’s immediate interests produces a worse outcome for everyone. At small scales, with stable communities and shared rules, these problems can often be solved. At large scales, with many agents and no enforcement authority, they become much harder to overcome. Three factors are particularly important in explaining why governing large-scale shared ecological systems is so difficult.
Free-rider problem: any country or company that benefits from others' costly actions to protect a shared system has an incentive to contribute less than its fair share. The fewer the consequences for doing so, the stronger this incentive becomes.
Power and impact asymmetry: the countries and communities bearing the greatest ecological costs are frequently not the same as those with the most influence in international institutions. This shapes which agreements get made, how ambitious they are, and whose interests they reflect.
State capture: commercial interests with large financial stakes in the current system shape the positions that states take in international negotiations. Fossil fuel and chemical companies, agribusiness, and financial institutions all have established ways to influence both domestic policies and international agreements.
Can international agreements solve collective action problems?
Can international agreements solve collective action problems?
International agreements try to solve collective action problems at a global level. They bring states together to negotiate shared commitments. This may reduce free-riding, because countries that miss their targets face pressure from other countries to do their part. These negotiations also give countries with less power a formal voice in setting the rules.
The two main forums for governing shared ecological systems operate under separate UN conventions:
The United Nations Framework Convention on Climate Change (UNFCCC) holds an annual climate conference called the Conference of the Parties (COP), which is the process you are most likely to have seen in news coverage;
The Convention on Biological Diversity (CBD) runs a separate COP process for biodiversity, which meets less frequently.
Both forums bring states together to agree commitments on ecological systems that no single country controls. These negotiations have produced real results, largely because lower-income and climate-vulnerable countries pushed hard for them. At the same time, more powerful countries have shaped every agreement. The outcomes have fallen short of what the science requires to protect the ecosystems we depend on.
The Paris Agreement on climate change
The Paris Agreement on climate change
The Paris Agreement was adopted at UNFCCC COP21 in Paris in 2015. It was the first international climate agreement in which every country set its own targets for cutting carbon dioxide (CO2) emissions. It also recognised that Global North countries are more responsible for the problem, because they have produced most of the historical emissions that have caused warming.
The agreement's main weakness is that it cannot be enforced. Countries set their own targets and face no legal penalty for missing them. One country's change of leadership can set back decades of international progress. The United States has withdrawn from the Paris Agreement twice under President Donald Trump (Figure 3).
Figure 3. Countries by their participation in the Paris Agreement as of January 27, 2026.
(Credit: Statista and UNFCCC)
In 2025, the International Court of Justice (ICJ) gave an opinion that states have legal duties to protect the climate under international law, and that breaking them can carry legal consequences, including reparations. The Court cannot enforce its opinion, so its effect depends on how states, courts and campaigners use it. It does give countries and individuals a legal argument to raise in negotiations and national courts.
The Loss and Damage Fund
The Loss and Damage Fund
At UNFCCC COP27 in Egypt in 2022, small island states and African governments won agreement to create a Loss and Damage Fund. This fund transfers money from the Global North to countries in the Global South that are suffering losses from climate change they did not cause. At COP28 in Dubai in 2023, the fund was set up with initial pledges of approximately $700 million. To understand whether $700 million is a lot, it helps to look at some research on what Global North countries might actually owe Global South countries in total.
Assume that each country has a fair share of the atmosphere's capacity to absorb CO₂, based on its population. Since 1960, some countries, mostly in the Global North, have used far more than their fair share. Other countries have used far less. In 2023, researchers calculated what this overuse is worth in money. They imagined a scenario where every country stops adding new emissions by 2050, a point called net zero.
In that scenario, countries that used more than their fair share would owe a total of $192 trillion to the countries that used less (Figure 4). The Global North accounts for around $170 trillion of this total. Of this total, Sub-Saharan Africa alone is owed an estimated $45 trillion. So the $700 million pledged at COP28 is about 0.002 per cent of the figure for Sub-Saharan Africa alone. This gap shows that the Global North is still treating climate finance as optional aid rather than as payment for a debt it owes to the Global South.
Figure 4. Compensation due for atmospheric appropriation. The red countries and groups owe payment due to overshooting their fair share of CO2 emissions, while the green countries are due payment for staying within their fair share.
(Credit: Fanning and Hickel)
The Kunming-Montreal Global Biodiversity Framework
The Kunming-Montreal Global Biodiversity Framework
At CBD COP15 in Montreal in 2022, governments agreed to the Kunming-Montreal Global Biodiversity Framework. The framework sets four broad goals for 2050: halting biodiversity loss and restoring nature, using land and sea sustainably, sharing the benefits of nature fairly, and mobilising the finance and resources needed to achieve all of this (Figure 5). Alongside these goals sit twenty-three more specific targets for 2030, covering areas such as species protection, pollution, sustainable food production, and business accountability. Its best-known target is called 30x30, protecting thirty per cent of the world's land and ocean areas by 2030.
Figure 5. A summary of the four areas of the Kunming-Montreal Global Biodiversity Framework. (Credit: Vigdis Vandvik)
The 30x30 target sets a goal for how much land and sea countries protect by 2030. It says these areas should be fairly governed and that the rights of Indigenous peoples and local communities must be respected. It has no way to check this, and progress is counted in hectares. The fastest way to reach the target is often for states to declare large protected areas.
Many of the areas likely to be protected are territories that indigenous and local communities have managed for generations. When a state declares such an area protected, it often removes these communities from decision-making or moves them out. Research shows that these communities often achieve better conservation outcomes than state-managed protected areas. When state or international bodies take over management, the results are frequently worse for both biodiversity and people. Who manages the land therefore affects whether the target protects biodiversity.
And, as with the Loss and Damage Fund, the international finance the Global North promised to support Kunming-Montreal has largely not materialised.
The Fossil Fuel Non-Proliferation Treaty
The Fossil Fuel Non-Proliferation Treaty
The agreements above all follow the same basic approach, asking countries to change what they do within their own borders. A group of Pacific Island states has proposed something different. These countries face the loss of their land and homes from rising seas caused by emissions elsewhere. Their proposal, the Fossil Fuel Non-Proliferation Treaty, calls for a legally binding global agreement to phase out fossil fuel production.
In March 2023, six Pacific governments issued the Port Vila Call for a Just Transition to a Fossil Fuel Free Pacific . This approach places responsibility for phasing out fossil fuel production on the countries and companies that dig up and sell fossil fuels, not only on the countries that burn them. The proposal is currently supported by 18 nations, with growing civil society, indigenous, and sub-national engagement.
Is regional cooperation a more realistic path than global governance?
Is regional cooperation a more realistic path than global governance?
Global agreements have produced real but insufficient results. Regional cooperation offers another direction. The conditions that Topic 4 showed are necessary for governing a commons are harder to achieve when nearly two hundred states must agree. A smaller group of countries sharing a specific ecosystem may have a better chance of meeting those conditions. The community is more bounded, the shared resource is more clearly defined, and the political relationships are closer.
Several regional attempts already exist, and they show both what is possible and what the limits are:
Rhine Action Programme: in November 1986, a chemical spill at a warehouse in Basel, Switzerland destroyed fish and wildlife along more than 400 kilometres of the Rhine River in Europe. Five countries and the European Commission responded with binding commitments and shared monitoring. Pollution levels fell dramatically and fish species returned within two decades.
Mekong River Commission: a governance framework exists for the river shared by six countries in Southeast Asia. But China has built extensive dams on the upper river without being bound by the commission's rules, significantly limiting its effectiveness.
Amazon Cooperation Treaty Organisation (ACTO): has eight member countries, and each contains part of the Amazon rainforest: Bolivia, Brazil, Colombia, Ecuador, Guyana, Peru, Suriname and Venezuela. Brazil holds the largest share of the rainforest. When Brazilian governments have opposed conservation commitments, ACTO has not been able to agree joint action, even when other members supported it.
ASEAN Agreement on Transboundary Haze Pollution: adopted in 2002 to address the smoke from Indonesian peat fires and plantation burning that regularly blanketed Singapore, Malaysia, and Brunei (Figure 6). The agreement created a regional legal framework and monitoring systems. It has repeatedly failed to stop the fires, however. Enforcement is weak, and plantation companies with strong political connections in Indonesia have continued burning despite the agreement.
Figure 6. Smoke from peatland fires blankets Borneo during the 2026 fire season, with fire detections concentrated in Indonesian Kalimantan.
(Credit: NASA Earth Observatory)
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The Ogiek govern their forest because the resource, the community and the rules are all in place. These three elements are much harder to build for the whole atmosphere, so the Ogiek model cannot simply be copied. Real gains exist all the same. Small island states and African governments won agreement to create the Loss and Damage Fund. Pacific island states proposed the Fossil Fuel Non-Proliferation Treaty, which 18 nations now support. In 2025 the International Court of Justice gave states and campaigners a legal argument to use. On the Rhine, binding rules brought fish species back within two decades. Forests managed by indigenous communities have kept more tree cover than forests under state protection. Most of these gains began with countries and communities that have less power, and each one gives later efforts something to build on. They still fall short of what the science requires, mainly because enforcement is weak and promised finance has not arrived. The next Section 7.4.7 looks at what smaller-scale actions can add.
Activity 7.4.6
Activity 7.4.6
Concept: Power, regeneration
Skills: Thinking skills (critical thinking, transfer)
Time: 30-35 minutes for each option
Type: Individual, pairs, or small group
Option 1: Barriers in practice
Step 1 - This section described three reasons why governing shared ecological systems at large scale is difficult:
Free-rider problem: a country or company benefits from others' costly action, so it contributes less than its fair share
Power and impact asymmetry: the countries bearing the greatest ecological costs are often not the ones with the most influence.
State capture: commercial interests shape the position governments take in negotiations.
For each of the four agreements below,
decide which barrier(s) are most visible, using evidence from the text or some quick research if you feel you do not have enough information. There can be more than one barrier involved.
For each agreement, write one sentence on what would need to change for that barrier to stop limiting the agreement's effectiveness.
The Paris Agreement
The Loss and Damage Fund
The Kunming-Montreal Global Biodiversity Framework
The Fossil Fuel Non-Proliferation Treaty
Step 2 - Pick one of the four agreements. Imagine it is now 2040, and the barrier you identified no longer limits it. The agreement is working as intended.
Draw on other ideas from Regenerative Economics you have studied, such as how money is created, places to intervene in a system, how reinforcing feedback loops of power and wealth can be disrupted, etc. Write two or three sentences describing a concrete change and how it addressed the barrier.
Click on the arrow below to see some sample responses, but give it a go yourself first!
There is no single correct answer for which barrier applies to each agreement, since more than one is often present. The following are reasonable examples of the reasoning expected.
The Paris Agreement: free-rider problem, but also state capture. The US withdrawing twice under President Trump is not only a free-rider problem; it reflects the strength of fossil fuel lobbying within US domestic politics, and even while a member, the US and other countries have set weak targets under the same pressure.
Example for Step 4: campaign finance rules restrict fossil fuel industry donations to political candidates, and countries require companies to publicly disclose their climate lobbying spending, making it harder for polluting industries to shape national positions from behind the scenes.The Loss and Damage Fund: power and impact asymmetry. The countries suffering the greatest climate impacts are not the ones deciding how much funding is pledged.
Example for Step 4: since money is a social construct that governments and international institutions can create rather than only collect through taxation, the IMF issues a large allocation of Special Drawing Rights specifically for climate-vulnerable countries, similar to how it created new money during the Covid-19 pandemic, instead of relying on voluntary pledges from the global North.The Kunming-Montreal Framework: state capture, or power and impact asymmetry. Money promised to support it has largely not been delivered, and Indigenous communities managing the land targeted for protection have little say in how the 30x30 target is implemented.
Example for Step 4: governments adopt Ostrom's commons design principles at the international level, giving Indigenous and local communities legally binding decision-making rights over any protected area on their land, rather than treating them as consultees whose views can be overruled by the state.The Fossil Fuel Non-Proliferation Treaty: power and impact asymmetry, and arguably state capture, since the proposal comes from small Pacific states while companies and countries most responsible for fossil fuel production have not joined.
Example for Step 4: countries impose a windfall tax on fossil fuel company profits, redirecting the revenue to fund the transition in lower-income countries and shrinking the same companies' financial capacity to lobby against phase-out agreements.
Any well-reasoned answer that names a specific mechanism, rather than a general statement like ‘attitudes changed’ or ‘there was more cooperation,’ is fine for the response.
Option 2: Who owes whom?
The researchers behind the $170 trillion climate debt calculation have published an interactive website where you can explore the data for every country in the study. Here you will engage with a small part of that data.
Step 1 - Look at the chart in Figure 7. Find the United States, Germany, India, and Nigeria. For each one, note whether it's a country that would pay or a country that would receive, and roughly how much per person per year.
Figure 7. The five countries that would owe the most, and the five that would be owed the most, according to recent research.
(Credit: Fanning and Hickel)
Step 2 - Now think about what you have read in this section. The Loss and Damage Fund was set up with initial pledges of approximately $700 million. Sub-Saharan Africa alone is owed an estimated $45 trillion.
The $192 trillion figure assumes emissions are counted from 1960. The same researchers also calculated the total using two other start years:
From 1850: around $238 trillion
From 1992: around $109 trillion
Consider the following questions:
Does the data change how you think about the phrase 'climate aid'? What would be a more accurate description of these transfers?
Why does the total change so much depending on the start year? Who benefits from choosing a later date?
One criticism of this kind of calculation is that it uses a particular definition of 'fair share', an equal per capita allocation of the carbon budget. Can you think of any other way of defining what a fair share might be, and how that might change the results?
Click on the arrow for sample responses, but give it a go yourself first!
‘Climate aid’ implies that wealthy countries are doing something generous and optional, giving money they have no obligation to give. But the Fanning and Hickel calculation shows that wealthy countries have already used far more than their fair share of the atmosphere's capacity to absorb CO₂. If the atmosphere is a shared resource, then overusing it means taking something that belonged to others. A more accurate phrase might be ‘climate debt repayment’ or ‘climate reparations.’ The difference matters politically, because aid can be stopped at any time, while a debt carries a moral and legal obligation to pay.
The start year matters because most of the excess CO₂ that wealthy countries produced occurred before 1960. Starting from 1850 produces a higher total debt. Starting from 1992 (the year the UNFCCC was established) produces a lower one, because it excludes more than a century of industrialisation. Wealthy, high-emitting countries benefit from a later start date because it reduces the compensation they would owe. Lower-income countries benefit from an earlier date because it recognises the full extent of atmospheric appropriation they have experienced. This shows that the choice of start year is a political question. Who decides where the clock starts has a direct effect on how much is owed and by whom.
The researchers (Fanning and Hickel) use equal per capita shares, each person on Earth is entitled to the same amount of atmospheric space. This is one definition of fairness, but not the only one.
An alternative would allocate shares based on a country's level of development, giving poorer countries larger shares because they still need to industrialise to meet basic needs. This would increase the debt owed by wealthy countries even further.
A third approach, favoured by some wealthy countries, would ignore historical emissions entirely and only count current or future emissions, which would dramatically reduce the calculated debt.
Each definition reflects different values about responsibility, need, and historical justice. The choice is always also a moral and political one. Any well-reasoned answer that identifies at least one alternative definition and considers what it would change is fine for the response.
Ideas for longer activities and projects are listed in Subtopic 7.5
Checking for understanding
Checking for understanding
Coming soon!
Further exploration
Further exploration
What is the Loss and Damage Fund? — A clear explainer from the MIT Climate Portal covering what loss and damage means, why it took thirty years of negotiation to agree a fund, what was decided at COP27 and COP28, and why the amounts pledged fall far below what is needed. Difficulty level: medium.
The Paris Agreement — The UNFCCC's official page on the Paris Agreement, covering how the five-year cycle of national climate plans (NDCs) works, how countries support one another through finance, technology and capacity-building, and how progress is tracked through the global stocktake. Includes links to the full treaty text and the original 2015 decision adopting it. Difficulty level: medium.
Fossil fuels are still destroying the planet, but this treaty aims to change that — A Global Citizen explainer on the Fossil Fuel Non-Proliferation Treaty Initiative: what the treaty proposes, why Pacific Island states are leading the campaign, how it differs from the Paris Agreement in placing responsibility on producers rather than consumers, and what momentum it has built so far. Difficulty level: easy.
The Amazon in danger: Indigenous peoples and their struggle for the rainforest — A 42-minute DW Documentary following Indigenous communities in the Brazilian Amazon defending their territories against deforestation. Connects directly to the discussion of the Amazon Cooperation Treaty Organisation and the evidence on Indigenous-managed territories having significantly lower deforestation rates than surrounding areas. Difficulty level: easy.
Southeast Asia's transboundary haze problem — A short explainer video from CNA (Channel NewsAsia), Singapore's main English-language broadcaster and one of the countries most directly affected by the annual haze. The video covers what causes the fires, why slash-and-burn land clearing for palm oil plantations keeps happening despite legal prohibitions, and why the ASEAN regional agreement has repeatedly failed to stop it. Difficulty level: easy.
Sources
Sources
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Carbon Brief. (2026). Developed countries failing to pay 'fair share' of nature finance ahead of COP16. https://www.carbonbrief.org/developed-countries-failing-to-pay-fair-share-of-nature-finance-ahead-of-cop16
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