Reading Responses(Less Than 1 Page)
2 reading responses, each of them will only be one paragraph
Global Environment and International Inequality
Author(s): Henry Shue
Source: International Affairs (Royal Institute of International Affairs 1944-), Vol. 75, No.
3 (Jul., 1999), pp. 531-545
Published by: Oxford University Press on behalf of the Royal Institute of International
Affairs
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Global environment and international
inequality
HENRY SHUE
My aim is to establish that three commonsense principles of fairness, none of
them dependent upon controversial philosophical theories ofjustice, give rise to
the same conclusion about the allocation of the costs of protecting the environ-
ment.
Poor states and rich states have long dealt with each other primarily upon
unequal terms. The imposition of unequal terms has been relatively easy for the
rich states because they have rarely needed to ask for the voluntary cooperation
of the less powerful poor states. Now the rich countries have realized that their
own industrial activity has been destroying the ozone in the earth’s atmosphere
and has been making far and away the greatest contribution to global warming.
They would like the poor states to avoid adopting the same form of industriali-
zation by which they themselves became rich. It is increasingly clear that if poor
states pursue their own economic development with the same disregard for the
natural environment and the economic welfare of other states that rich states
displayed in the past during their development, everyone will continue to suffer
the effects of environmental destruction. Consequently, it is at least conceivable
that rich states might now be willing to consider dealing cooperatively on
equitable terms with poor states in a manner that gives due weight to both the
economic development of poor states and the preservation of the natural
environment.
If we are to have any hope of pursuing equitable cooperation, we must try to
arrive at a consensus about what equity means. And we need to define equity,
not as a vague abstraction, but concretely and specifically in the context of both
development of the economy in poor states and preservation of the environ-
ment everywhere.
Fundamental fairness and acceptable inequality
What diplomats and lawyers call equity incorporates important aspects of what
ordinary people everywhere call fairness. The concept of fairness is neither
International Affairs 75, 3 (I999) 531I-545 5 3I
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Henry Shue
Eastern nor Western, Northern nor Southern, but universal.’ People every-
where understand what it means to ask whether an arrangement is fair or biased
towards some parties over other parties. If you own the land but I supply the
labour, or you own the seed but I own the ox, or you are old but I am young,
or you are female but I am male, or you have an education and I do not, or you
worked long and hard but I was lazy-in situation after situation it makes
perfectly good sense to ask whether a particular division of something among
two or more parties is fair to all the parties, in light of this or that difference
between them. All people understand the question, even where they have been
taught not to ask it. What would be fair? Or, as the lawyers and diplomats
would put it, which arrangement would be equitable?
Naturally, it is also possible to ask other kinds of questions about the same
arrangements. One can always ask economic questions, for instance, in addition
to ethical questions concerning equity: would it increase total output if, say,
women were paid less and men were paid more? Would it be more efficient?
Sometimes the most efficient arrangement happens also to be fair to all parties,
but often it is unfair. Then a choice has to be made between efficiency and fair-
ness. Before it is possible to discuss such choices, however, we need to know
the meaning of equity: what are the standards of equity and how do they matter?
Complete egalitarianism-the belief that all good things ought to be shared
equally among all people-can be a powerfully attractive view, and it is much
more difficult to argue against than many of its opponents seem to think. I shall,
nevertheless, assume here that complete egalitarianism is unacceptable. If it
were the appropriate view to adopt, our inquiry into equity could end now.
The answer to the question, ‘what is an equitable arrangement?’ would always
be the same: an equal distribution. Only equality would ever provide equity.
While I do assume that it may be equitable for some good things to be
distributed unequally, I also assume that other things must be kept equal-most
importantly, dignity and respect. It is part of the current international consensus
that every person is entitled to equal dignity and equal respect. In traditional
societies in both hemispheres, even the equality of dignity and respect was
denied in theory as well as practice. Now, although principles of equality are
still widely violated in practice, inequality of dignity and of respect have
relatively few public advocates even among those who practice them. If it is
equitable for some other human goods to be distributed unequally, but it is not
equitable for dignity or respect to be unequal, the central questions become:
‘which inequalities in which other human goods are compatible with equal
human dignity and equal human respect?’ and ‘which inequalities in other
goods ought to be eliminated, reduced or prevented from being increased?’
When one is beginning from an existing inequality, like the current inequality
in wealth between North and South, three critical kinds of justification are:
Or so I believe. I would be intensely interested in any evidence of a culture that seems to lack a concept
of fairness, as distinguished from evidence about two cultures whose specific conceptions of fairness differ
in some respects.
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Global environment and international inequality
justifications of unequal burdens intended to reduce or eliminate the existing
inequality by removing an unfair advantage of those at the top; justifications of
unequal burdens intended to prevent the existing inequality from becoming
worse through any infliction of an unfair additional disadvantage upon those at
the bottom; and justifications of a guaranteed minimum intended to prevent the
existing inequality from becoming worse through any infliction of an unfair
additional disadvantage upon those at the bottom. The second justification for
unequal burdens and the justification for a guaranteed minimum are the same:
two different mechanisms are being used to achieve fundamentally the same
purpose. I shall look at these two forms of justification for unequal burdens and
then at the justification for a guaranteed minimum.
Unequal burdens
Greater contribution to the problem
All over the world parents teach their children to clean up their own mess. This
simple rule makes good sense from the point of view of incentive: if one learns
that one will not be allowed to get away with simply walking away from what-
ever messes one creates, one is given a strong negative incentive against making
messes in the first place. Whoever makes the mess presumably does so in the
process of pursuing some benefit-for a child, the benefit may simply be the
pleasure of playing with the objects that constitute the mess. If one learns that
whoever reaps the benefit of making the mess must also be the one who pays
the cost of cleaning up the mess, one learns at the very least not to make messes
with costs that are greater than their benefits.
Economists have glorified this simple rule as the ‘internalization of extern-
alities’. If the basis for the price of a product does not incorporate the costs of
cleaning up the mess made in the process of producing the product, the costs are
being externalized, that is, dumped upon other parties. Incorporating into the
basis of the price of the product the costs that had been coercively socialized is
called internalizing an externality.
At least as important as the consideration of incentives, however, is the
consideration of fairness or equity. If whoever makes a mess receives the bene-
fits and does not pay the costs, not only does he have no incentive to avoid
making as many messes as he likes, but he is also unfair to whoever does pay the
costs. He is inflicting costs upon other people, contrary to their interests and,
presumably, without their consent. By making himself better off in ways that
make others worse off, he is creating an expanding inequality.
Once such an inequality has been created unilaterally by someone’s imposing
costs upon other people, we are justified in reversing the inequality by imposing
extra burdens upon the producer of the inequality. There are two separate
points here. First, we are justified in assigning additional burdens to the party
who has been inflicting costs upon us. Second, the minimum extent of the
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Henry Shue
compensatory burden we are justified in assigning is enough to correct the
inequality previously unilaterally imposed. The purpose of the extra burden is
to restore an equality that was disrupted unilaterally and arbitrarily (or to reduce
an inequality that was enlarged unilaterally and arbitrarily). In order to accom-
plish that purpose, the extra burden assigned must be at least equal to the unfair
advantage previously taken. This yields us our first principle of equity:
When a party has in the past taken an unfair advantage of others by imposing costs upon
them without their consent, those who have been unilaterally put at a disadvantage are
entitled to demand that in the future the offending party shoulder burdens that are
unequal at least to the extent of the unfair advantage previously taken, in order to
restore equality.2
In the area of development and the environment, the clearest cases that fall
under this first principle of equity are the partial destruction of the ozone layer
and the initiation of global warming by the process of industrialization that has
enriched the North but not the South. Unilateral initiatives by the so-called
developed countries (DCs) have made them rich, while leaving the less
developed countries (LDCs) poor. In the process the industrial activities and
accompanying lifestyles of the DCs have inflicted major global damage upon
the earth’s atmosphere. Both kinds of damage are harmful to those who did not
benefit from Northern industrialization as well as to those who did. Those
societies whose activities have damaged the atmosphere ought, according to the
first principle of equity, to bear sufficiently unequal burdens henceforth to
correct the inequality that they have imposed. In this case, everyone is bearing
costs-because the damage was universal-but the benefits have been over-
whelmingly skewed towards those who have become rich in the process.
This principle of equity should be distinguished from the considerably
weaker-because entirely forward-looking-‘polluter pays principle’ (PPP),
which requires only that all future costs of pollution (in production or
consumption) be henceforth internalized into prices. Even the OECD formally
adopted the PPP in I974, to govern relations among rich states.3
Spokespeople for the rich countries make at least three kinds of counter-
arguments to this first principle of equity. These are:
i. The LDCs have also benefited, it is said, from the enrichment of the
DCs. Usually it is conceded that the industrial countries have benefited more
than the non-industrialized. Yet it is maintained that, for example, medicines
and technologies made possible by the lifestyles of the rich countries have also
reached the poor countries, bringing benefits that the poor countries could not
have produced as soon for themselves.
2 A preliminary presentation of these principles at New York University Law School has been helpfully
commented upon in Thomas M. Franck, Fairness in international law and institutions (Oxford: Clarendon,
I997), pp. 390-9I.
3 OECD Council, I4 November I974C (I974), 223 (Paris: OECD, I974).
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Global environment and international inequality
Quite a bit of breath and ink has been spent in arguments over how much
LDCs have benefited from the technologies and other advances made by the
DCs, compared to the benefits enjoyed by the DCs themselves. Yet this dispute
does not need to be settled in order to decide questions of equity. Whatever
benefits LDCs have received, they have mostly been charged for. No doubt
some improvements have been widespread. Yet, except for a relative trickle of
aid, all transfers have been charged to the recipients, who have in fact been left
with an enormous burden of debt, much of it incurred precisely in the effort to
purchase the good things produced by industrialization.
Overall, poor countries have been charged for any benefits that they have
received by someone in the rich countries, evening that account. Much greater
additional benefits have gone to the rich countries themselves, including a
major contribution to the very process of their becoming so much richer than
the poor countries. Meanwhile, the environmental damage caused by the
process has been incurred by everyone. The rich countries have profited to the
extent of the excess of the benefits gained by them over the costs incurred by
everyone through environmental damage done by them, and ought in future to
bear extra burdens in dealing with the damage they have done.
2. Whatever environmental damage has been done, it is said, was uninten-
tional. Now we know all sorts of things about CFCs and the ozone layer, and
about carbon dioxide and the greenhouse effect, that no one dreamed of when
CFCs were created or when industrialization fed with fossil fuels began. People
cannot be held responsible, it is maintained, for harmful effects that they could
not have foreseen. The philosopher Immanuel Kant is often quoted in the West
for having said, ‘Ought presupposes can’-it can be true that one ought to have
done something only if one actually could have done it. Therefore, it is
allegedly not fair to hold people responsible for effects they could not have
avoided because the effects could not have been predicted.
This objection rests upon a confusion between punishment and respon-
sibility. It is not fair to punish somneone for producing effects that could not
have been avoided, but it is common to hold people responsible for effects that
were unforeseen and unavoidable.
We noted earlier that, in order to be justifiable, an inequality in something
between two or more parties must be compatible with an equality of dignity
and respect between the parties. If there were an inequality between two groups
of people such that members of the first group could create problems and then
expect members of the second group to deal with the problems, that inequality
would be incompatible with equal respect and equal dignity. For the members
of the second group would in fact be functioning as servants for the first group.
If I said to you, ‘I broke it, but I want you to clean it up’, then I would be your
master and you would be my servant. If I thought that you should do my
bidding, I could hardly respect you as my equal.
It is true, then, that the owners of many coal-burning factories could not
possibly have known the bad effects of the carbon dioxide they were releasing
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into the atmosphere, and therefore could not possibly have intended to contri-
bute to harming it. It would, therefore, be unfair to punish them-by, for
example, demanding that they pay double or triple damages. It is not in the least
unfair, however, simply to hold them responsible for the damage that they have
in fact done. This naturally leads to the third objection.
3. Even if it is fair to hold a person responsible for damage done uninten-
tionally, it will be said, it is not fair to hold the person responsible for damage he
did not do himself. It would not be fair, for example, to hold a grandson
responsible for damage done by his grandfather. Yet it is claimed this is exactly
what is being done when the current generation is held responsible for carbon
dioxide emissions produced in the nineteenth century. Perhaps Europeans
living today are responsible for atmosphere-damaging gases ermitted today, but
it is not fair to hold people responsible for deeds done long before they were
born.
This objection appeals to a reasonable principle, namely that one person
ought not to be held responsible for what is done by another person who is
completely unrelated. ‘Completely unrelated’ is, however, a critical portion of
the principle. To assume that the facts about the industrial North’s contribution
to global warming straightforwardly fall under this principle is to assume that
they are considerably simpler than they actually are.
First, and undeniably, the industrial states’ contributions to global warming
have continued unabated long since it became impossible to plead ignorance. It
would have been conceivable that as soon as evidence began to accumulate that
industrial activity was having a dangerous environmental effect, the industrial
states would have adopted a conservative or even cautious policy of cutting
back greenhouse-gas emissions or at least slowing their rate of increase. For the
most part this has not happened.
Second, today’s generation in the industrial states is far from completely
unrelated to the earlier generations going back all the way to the beginning of
the Industrial Revolution. What is tlhe difference between being born in I975
in Belgium and being born in I975 in Bangladesh? Clearly one of the most
fundamental differences is that the Belgian infant is born into an industrial
society and the Bangladeshi infant is not. Even the medical setting for the birth
itself, not to mention the level of prenatal care available to the expectant
mother, is almost certainly vastly more favourable for the Belgian than the
Bangladeshi. Childhood nutrition, educational opportunities and life-long
standards of living are likely to differ enormously because of the difference
between an industrialized and a non-industrialized economy. In such respects
current generations are, and future generations probably will be, continuing
beneficiaries of earlier industrial activity.
Nothing is wrong with the principle invoked in the third objection. It is
indeed not fair to hold someone responsible for what has been done by
someone else. Yet that principle is largely irrelevant to the case at hand, because
one generation of a rich industrial society is not unrelated to other generations
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Global environment and international inequality
past and future. All are participants in enduring economriic structures. Benefits
and costs, and rights and responsibilities, carry across generations.
We turn now to a second, quite different kind of justification of the same
mechanism of assigning unequal burdens. This first justification has rested in
part upon the unfairness of the existing inequality. The second justification
neither assumes nor argues that the initial inequality is unfair.
Greater ability to pay
The second principle of equity is widely accepted as a requirement of simple
fairness. It states:
Among a number of parties, all of whom are bound to contribute to some common
endeavour, the parties who have the most resources normally should contribute the
most to the endeavour.
This principle of paying in accordance with ability to pay, if stated strictly,
would specify what is often called a progressive rate of payment: insofar as a
party’s assets are greater, the rate at which the party should contribute to the
enterprise in question also becomes greater. The progressivity can be strictly
proportional-those with double the base amount of assets contribute at
twice the rate at which those with the base amount contribute, those with
triple the base amount of assets contribute at three times the rate at which
those with the base amount contribute, and so on. More typically, the
progressivity is not strictly proportional-the more a party has, the higher the
rate at which it is expected to contribute, but the rate does not increase in
strict proportion to increases in assets.
The general principle itself is sufficiently fundamental that it is not
necessary, and perhaps not possible, to justify it by deriving it from con-
siderations that are more fundamental still. Nevertheless, it is possible to
explain its appeal to some extent more fully. The basic appeal of payment in
accordance with ability to pay as a principle of fairness is easiest to see by
contrast with a flat rate of contribution, that is, the same rate of contribution
by every party irrespective of different parties’ differing assets. At first
thought, the same rate for everyone seems obviously the fairest imaginable
arrangement. What could possibly be fairer, one is initially inclined to think,
than absolutely equal treatment for everyone? Surely, it seems, if everyone
pays an equal rate, everyone is treated the same and therefore fairly? This,
however, is an exceedingly abstract approach, which pays no attention at all
to the actual concrete circumstances of the contributing parties. In addition, it
focuses exclusively upon the contribution process and ignores the position in
which, as a result of the process, the parties end up. Contribution according
to ability to pay is much more sensitive both to concrete circumstance and to
final outcome.
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Henry Shue
Suppose that Party A has go units of something, Party B has 30 units, and
Party C has 9 units. In order to accomplish their missions, it is proposed that
everyone should contribute at a flat rate of one-third. This may seem fair in that
everyone is treated equally: the same rate is applied to everyone, regardless of
circumstances. When it is considered that A’s contribution will be 30 and B’s
will be io, while C’s will be only 3, the flat rate may appear more than fair to C
who contributes only one-tenth as much as A does. However, suppose that
these units represent $ioo per year in income and that where C lives it is
possible to survive on $750 per year but on no less. If C must contribute 3
units-$3oo-he will fall below the minimum for survival. While the flat rate
of one-third would require A to contribute far more ($3 ,ooo) than C, and B to
contribute considerably more ($i,ooo) than C, both A (with $6,ooo left) and B
(with $2,000 left) would remain safely above subsistence level. A and B can
afford to contribute at the rate of one-third because they are left with more than
enough while C is unable to contribute at that rate and survive.
While flat rates appear misleadingly fair in the abstract, they do so largely
because they look at only the first part of the story and ignore how things turn
out in the end. The great strength of progressive rates, by contrast, is that they
tend to accommodate final outcomes and take account of whether the
contributors can in fact afford their respective contributions.
A single objection is usually raised against progressive rates of contribution:
disincentive effects. If those who have more are going to lose what they have at
a greater rate than those who have less, the incentive to come to have more in
the first place will, it is said, be much less than it would have been with a flat rate
of contribution. Why should I take more risks, display more imagination, or
expend more effort in order to gain more resources if the result will only be
that, whenever something must be paid for, I will have to contribute not merely
a larger absolute amount (which would happen even with a flat rate) but a larger
percentage? I might as well not be productive if much of anything extra I
produce will be taken away from me, leaving me little better off than those who
produced far less.
Three points need to be noticed regarding this objection. First, of course,
being fair and providing incentives are two different matters, and there is
certainly no guarantee in the abstract that whatever arrangement would provide
the greatest incentives would also be fair.
Second, concerns about incentives often arise when it is assumed that maximum
production and limitless growth are the best goal. It is increasingly clear that
many current forms of production and growth are unsustainable and that the last
thing we should do is to give people self-interested reasons to consume as many
resources as they can, even where the resources are consumed productively. These
issues cannot be settled in the abstract either, but it is certainly an open question-
and one that should be asked very seriously-whether in a particular situation it
is desirable to stimulate people by means of incentives to maximum production.
Sometimes it is desirable, and sometimes it is not. This is an issue about ends.
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Global environment and international inequality
Third, there is a question about means. Assuming that it had been demon-
strated that the best goal to have in a specific set of circumstances involved
stimulating more production of something, one would then have to ask: how
much incentive is needed to stimulate that much production? Those who are
preoccupied with incentives often speculate groundlessly that unlimited
incentives are virtually always required. Certainly it is true that it is generally
necessary to provide some additional incentive in order to stimulate additional
production. Some people are altruistic and are therefore sometimes willing to
contribute more to the welfare of others even if they do not thereby improve
their own welfare. It would be completely unrealistic, however, to try to
operate an economy on the assumption that people generally would produce
more irrespective of whether doing so was in their own interest-they need
instead to be provided with some incentive. However, some incentive does not
mean unlimited incentive.
It is certainly not necessary to offer unlimited incentives in order to stimulate
(limited) additional production by some people (and not others). Whether people
respond or not depends upon individual personalities and individual circum-
stances. It is a factual matter, not something to be decreed in the abstract, how
much incentive is enough: for these people in these circumstances to produce
this much more, how much incentive is enough? What is clearly mistaken is the
frequent assumption that nothing less than the maximum incentive is ever
enough.
In conclusion, insofar as the objection based on disincentive effects is
intended to be a decisive refutation of the second principle of equity, the
objection fails. It is not always a mistake to offer less than the maximum possible
incentive, even when the goal of thereby increasing production has itself been
justified. There is no evidence that anything less than the maximum is even
generally a mistake. Psychological effects must be determined case by case.
On the other hand, the objection based on disincentive effects may be
intended-much more modestly-simply as a warning that one of the possible
costs of restraining inequalities by means of progressive rates of contribution, in
the effort of being fair, may (or may not) be a reduction in incentive effects. As
a caution rather than a (failed) refutation, the objection points to one sensible
consideration that needs to be taken into account when specifying which
variation upon the general second principle of equity is the best version to adopt
in a specific case. One would have to consider how much greater the incentive
effect would be if the rate of contribution were less progressive, in light of how
unfair the results of a less progressive rate would be.
This conclusion that disincentive effects deserve to be considered, although
they are not always decisive, partly explains why the second principle of equity
is stated, not as an absolute, but as a general principle. It says: ‘… the parties who
have the most resources normally should contribute the most…’-not always,
but normally. One reason why the rate of contribution might not be progress-
ive, or might not be as progressive as possible, is the potential disincentive
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effects of more progressive rates. It would need to be shown case by case that an
important goal was served by having some incentive and that the goal in
question would not be served by the weaker incentive compatible with a more
progressive rate of contribution.
We have so far examined two quite different kinds ofjustifications of unequal
burdens: to reduce or eliminate an existing inequality by removing an unfair
advantage of those at the top and to prevent the existing inequality from
becoming worse through any infliction of an unfair additional disadvantage
upon those at the bottom. The first justification rests in part upon explaining why
the initial inequality is unfair and ought to be removed or reduced. The second
justification applies irrespective of whether the initial inequality is fair. Now we
turn to a different mechanism that-much more directly-serves the second
purpose of avoiding making those who are already the worst-off yet worse off.
Guaranteed minimum
We noted earlier that issues of equity or fairness can arise only if there is some-
thing that must be divided among different parties. The existence of the
following circumstances can be taken as grounds for thinking that certain parties
have a legitimate claim to some of the available resources: (a) the aggregate total
of resources is sufficient for all parties to have more than enough; (b) some
parties do in fact have more than enough, some of them much more than
enough; and (c) other parties have less than enough. American philosopher
Thomas Nagel has called such circumstances radical inequality.4 Such an
inequality is radical in part because the total of available r
