There are four important questions that should be addressed in the context of this workshop. The first question is where does the international community stand today politically in terms of the international climate for reform of global institutions? Secondly, what is the direction in which the international community should move? The third question is what movement is realistic for the G7 Summit in Halifax? And the final question is what are the political realities in talking about international institutional reform and its effect on the UN system?

With the new US Congress, it appears at this point that expectations for a grand new design of institutions should not be too high. Indeed, with regard to the current international interest in global environmental affairs, priorities have been higher in the last few years than they are today, and this has been confirmed to some degree in the preparations for the Berlin Conference on Climate Change. The German government still wants to make the Berlin Conference a success, and it will be a success; but the yardstick by which success is measured had to be redefined.

During the climate change negotiations in the last six months, several key factors have become evident. First, the major powers in the world, including the United States and Russia, are not generally supportive of environmental regulatory measures at the international level. Second, the Third World, from a completely different angle, is concerned about environmental issues in two ways. The Third World recognizes that there will be problems in China, India, Brazil, and other newly industrialized countries (NICs), but also, green conditionality is seen as a cause for concern. The Chinese government emphasizes the right to grow and to be industrialized before long. China points out that the West has already gone through the process of industrialization and must not defeat Chinese efforts to do the same. Nevertheless, the Chinese government has made an impressive effort to develop a lengthy national agenda for the environment, having realized that it is in its own enlightened selfinterest. It remains to be seen how they translate this agenda into reality.

No one would have expected such an enormous step involving all major authorities in Beijing.

Generally speaking, however, China and the Third World are still, by and large, sceptical about developments at the international environmental level.

During the climate change negotiations it has also become apparent that longterm tasks are usually not at the forefront of governments' agendas. In addition, environmental regulation is an international task, and governments have not been keen to espouse matters which they cannot control on the national level and which affect the competitiveness of their economies. In addressing climate change, the German government has committed itself to reducing greenhouse gas emissions by 25% in the year 2005. The government still sticks to this position, but the economic and the industrial communities have made the point that if Germany works in this direction and achieves this goal, only a very small percentage of the global emissions will be reduced by the year 2005. If others continue with business as usual, those national German efforts will be completely wiped out. Why should German industry be subjected to such treatment?

What has also become apparent, and is of some concern, is that in Berlin there may be some kind of confrontation between the developing countries and the developed countries. The argument has been made quite forcefully, especially by the United States, that developing countries must also take action in the near future. Otherwise, the measures to be adopted by the developed countries will not be useful. The answers to the problem are in the Climate Change Convention. First, the Convention explicitly states that developed countries "must take the lead." And second, there is the now famous call in the Convention for "common but differentiated responsibility."

Two requirements emanate from this framework. First, the industrialized states must act first. Second, in the long run, if the developing countries will not act, then the global situation will not improve; indeed it will get much worse. Therefore, the developed world must enter into a dialogue with the developing countries with regard to when, how, and under what circumstances they are willing to take action. First and foremost, a change in their technology path is needed, and especially a change in energy efficiency. These changes will take time, and will not happen tomorrow in China or India, but one must start planning due to the long lead times.

There exists a fairly simple solution. Developing countries should not be asked for commitments right now; but they should be asked to establish some kind of procedure as to when and what, and under which circumstances they would be willing to take some kind of action. This will not be an easy task. China, India, Brazil, and Nigeria, for example, resent such an approach but in the long run it is the way things must move.

So, the shortterm prospects for institutional reform are relatively bleak?

First, on a very practical level, in Europe, and perhaps even in the United States, there is an overwhelming concern with political issues which permeate every day life ¾ the issues of Russia and Serbia, for example. Europe has gone through a period of financial consolidation. Europeans, who see media coverage of events in Serbia on television, for example, are going through a period of disillusion with the United Nations which is much more profound than any disillusion being felt in North America. Thus, arguments to improve and strengthen the UN may often fall on deaf ears in Europe. It is a difficult context that must be taken into account as the governments plan for Halifax.

It is unrealistic and overambitious to expect substantive results on institutional reform at Halifax.

However, Halifax must initiate a process. In considering what such a process should look like, more interesting questions begin to surface. What is the future role of the United Nations Environment Programme (UNEP)?

In order to consider this, one must ask how did UNEP start? What is the current legislative power of UNEP? In 1972, the major powers insisted that the statutory basis for UNEP define the organization with a small secretariat. Also, coming out of Stockholm in 1972, the major issues were transboundary ones such as acid rain and fresh water. In 1995, the situation is quite different and the issues are truly global. Thus, while UNEP was a good start, it is not equipped to stand up to the challenges of the 21st century.

Should UNEP be blamed for the current situation? There are three important variables; first, the budget of UNEP; second, the personnel situation of UNEP; and third, the location of UNEP. These are all important constraints which contribute to the difficult situation in which UNEP finds itself today. The question is where to go from here? What does UNEP not do today? UNEP is not the authoritative voice on the international environment. The international environment needs an organization that can parallel what the World Trade Organization (WTO) is to the General Agreement on Trade and Tariffs (GATT), what the World Health Organization is to health, and what the International Monetary Fund (IMF) is to financial stability.

From a practical standpoint, this organization should be built on UNEP. This is the wrong time to begin to talk about a new international organization. Further, moving UNEP out of Nairobi to New York or Geneva brings up a number of very difficult political questions. Developing countries, including China, India and Brazil, will all point out that UNEP is the only major UN program that is located in the Third World. Neither will the developing countries change their course on financial issues. It would be unrealistic and politically unpalatable to move UNEP out of Nairobi, and it would initiate a number of problematic discussions with no practical result.

Instead, the Kenyan government must be encouraged to provide the infrastructure needed for UNEP. It has already done some very useful things, but much more is needed to create a context in which UNEP can run efficiently and effectively. If this proves impossible, perhaps in five years or so it could be reconsidered. Meanwhile, however, decentralization is also an option and UNEP's regional offices could be strengthened.

As well, there might be a fundamental reconsideration of UNEP's statutory basis as a UN program which emphasizes that national sovereignty might be reconsidered in the future. The legal basis for UNEP needs to be changed, and UNEP needs to have new powers.

However, before UNEP can be revamped, many people will argue that it must first show a willingness to exercise those powers that it has now in an effective manner. This is a bit of a catch22. If UNEP demonstrates a high degree of administrative efficiency, then people will be more willing to discuss changes within the organization. It is very difficult to get good personnel to Nairobi. In this respect, the best must be made out of the situation.

Given this diagnosis, in Halifax, the G7 leaders should set up a task force to review the current

environmental institutions in terms of their jurisdictions, their overlap, their coordination, and their efficiency. From the perspective of overlap, at the moment there are four separate agencies working on methodologies for the identification and measurement of greenhouse gas emissions for climate change, and this in a time of financial cutbacks.

While UNEP might have the mission to be a catalyst, it is never in any position to change the course or the policies of the World Bank, the IMF, the UNDP, or other agencies. So, perhaps the idea that UNEP has a catalytic role must be reconsidered. We need a task force that simply has a mandate to ensure that the work of all the specialized agencies is consistent with the common goal of sustainable development.

UNEP should remain, but should be strengthened. It should not be submerged in a larger sustainable development agency (which does not yet exist); if it is, the environment will not be protected adequately.

The concept of a global trusteeship should not replace an environmental agency within the UN system. Nevertheless, it would be a good idea to have the trusteeship council administer the global commons in a broad sense, including the oceans, outer space and the Arctic.

With regard to the international economic and financial institutions, the objective for Halifax should be relatively simple: to establish a second task force with the mandate to review whether the work of the IMF, the World Bank, the WTO, the Food and Agricultural Organization (FAO), and other specialized agencies, is consistent with the objectives of sustainable development. Within the European Union, perhaps the most difficult environmental issue for the future is the common agricultural policy; therefore, internationally, this review has to be broad enough to include organizations such as the FAO.

The IMF has a legal mandate at the moment which is concerned primarily with financial stability and some other issues. Nevertheless, it is necessary to ask: is the work of these agencies consistent with the objectives of sustainable development? This is not always the case at the moment. It would be a good result for Halifax, if the two task forces could be set up to examine the work of the international agencies and to ensure that they are, at the very least, consistent with the common goal of sustainable development.

---

Rudolph Dolzer is Director General of the Federal Chancellory of Germany.