Systemic Risk Analysis of the International Environmental Treaty System: A Perspective through the lens of Problem-shifting

The development of global governance structures as systemic, interrelated, and ever-evolving prompts for consideration of systemic certainty, output, and resilience of our institutions. Systemic interdependencies and decentralized impact of institutional actions call for an objective analysis of risks posed to these structures. Problem-shifting is the phenomenon of international environmental treaties attaining their goals at the expense of the whole system. It reduces the ability of the treaty system to deliver a net positive output and is a source of systemic risk. Problem-shifting, thus, provides us a lens to understand and seek a resilient and risk-safe treaty system capable of delivering sustained environmental dividends. The cumulative problem-shifting risk, a form of environmental risk, is the chance of the international environmental treaty system being unable to meet its cumulative objectives due to problem-shifts between various treaties leading to a net negative impact and deleterious effects on the earth’s environment. However, implications of problem-shifting on risk tolerance and capabilities of this system have not been explored. Here, employing the lens of problem-shifting, we examine risk tolerance and systemic risk within the treaty system by developing a risk model and employing system dynamics modelling. We use systemic performance and points of failure, and stress in the network representing treaties to realize the dynamic evolution of the network by applying the developed risk model. Points of failure are tested using corresponding risk tolerance and flow of risk leading to an evaluation of cascading risks across the whole system. The work identifies certain nodes in the treaty network, whose performance is critical to the system's capability to withstand cascading risks. The work, thus, quantifies and tests the systemic risk posed by problem-shifting. Outcomes of the work would contribute to the literature on international organizations, adaptive governance, and their resilience to cascading risks at the system level.