Keywords: agency theory, externalities, climate change, greenhouse gases, GHG emissions, global warming, developing countries, law, resource management, carbon dioxide
The law, agency and global climate change
Consideration of policy for addressing global climate change must start with a recognition of the conflicting interests of the industrialised and the developing nations. Effective resource management regimes require a structure of incentives that will induce nations with disparate interests to cooperate and to resist temptations to defect from international agreements. Agency theory offers insights as to how such resource management regimes might be sustained. Industrialised nations must be prepared to offer inducements to agrarian nations to encourage the maintenance of tropical biomass. Moreover, technical assistance to encourage the development of technologies that are efficient in the use of carbon fuels is also essential.