This essay is part of a series of articles, edited by Stewart Patrick, emerging from the Carnegie Working Group on Reimagining Global Economic Governance.
Reviving multilateral cooperation requires nothing less than a normative revolution in international affairs. To build a more inclusive and resilient world order capable of addressing climate change and other shared global challenges, humanity needs to adopt four core principles of collective action: solidarity (S), agency (A), redirection of material gain (G), and environmental regeneration (E). These principles provide a basis for reimagining and adapting existing rules and institutions governing the world economy, allowing countries to coordinate their respective national efforts while following unique pathways to achieve shared global goals. Together, these principles constitute a SAGE approach to multilateral cooperation. The deepening climate emergency shows why such principles are urgently needed—and how they might apply in practice.
Shared Identity, Solidarity, and Purpose (S)
To address any shared challenge, the magnitude of our collective effort must correspond to the magnitude of problem. In the case of global warming, the collective goal must be global, as greenhouse gases emitted anywhere affect people everywhere. Achieving the global objective of dramatic emissions reductions, as well as meeting adaptation challenges, is likely to require not only shared interests but also a shared sense of identity, solidarity, and purpose.
Shared interests are important, but not sufficient for addressing shared challenges. Much progress in international affairs can be made if nations agree to common rules that align national interests with the global public interest. However, this approach by itself—even if successful—cannot stop climate change, for two simple reasons. First, many poor and developing countries cannot afford to take climate action at a level of ambition compatible with the stabilization of the earth’s climate system. The only way forward involves technology transfers and financial assistance from richer developed countries—but doing so would not fit the narrow self-interest of those that could provide such options. Second, it is practically impossible to realign national interests to internalize all intercountry externalities. Many of these externalities arise from asymmetries of both market power and information, and it is not in the national interests of the privileged countries to eliminate these asymmetries.
On this account, the realignment of national interests must be accompanied by shared identity, solidarity, and purpose with regard to global problems. In addressing climate change, the normative revolution in international affairs must involve promoting a sense of common humanity. National leaders and citizens alike will need to view themselves as part of a common ecosystem striving to protect our planet. Political leaders must accept their moral responsibility to mobilize their citizens not behind narrow national purposes, but in service of the common global purpose of stopping global warming.
This certainly does not mean that national identities should dissolve into a global one. Rather, we should recognize that we are all in the same boat when we formulate our global climate objectives. As noted in the Paris Climate Agreement, each country can pursue different approaches to a common global climate goal, corresponding to their different economic, political, and social conditions. The overall objectives, however, must be set with all of humanity in mind. The moral obligation to stop global warming must have global, widespread recognition, similarly to the way humanity has come to consider the abolition of slavery a universal moral value. This moral obligation is meant to generate a sense of human solidarity in response to a global challenge, along with a sense of human agency in addressing the challenge.
A necessary condition for shared identity, solidarity, and purpose is equity. This element involves procedural fairness (ensuring that the decisionmaking is unbiased and provides opportunities for input) and distributional fairness (ensuring the equitable allocation of resources or outcomes among individuals and communities). Needless to say, equity among individuals and groups does not necessarily imply equally distributed authority and power. All that is required is legitimacy for the group’s power structure, meaning the consent of the governed. The latter’s consent usually is obtained through fair distribution of contributions and benefits.
Procedural fairness generally is understood to involve impartiality, transparency and accountability, inclusivity, and consistency. Impartial decisionmaking involves treating all individuals or groups without favoritism or bias, considering only relevant factors. In a hiring process, for example, impartiality ensures that a prospective employer evaluates candidates solely on their qualifications and skills, irrespective of personal connections. Transparent decisionmaking processes provide clear information about the criteria used and the reasoning behind decisions, promoting accountability. Consistent decisionmaking ensures that similar cases or individuals are treated similarly, avoiding arbitrary distinctions.
In the case of climate policy, these practices of impartiality, transparency, accountability, and consistency involve agreement on common metrics measuring the climate impacts of governments, businesses, and civil societies, associated with associated reporting mechanisms. Furthermore, the social impact of climate action—particularly with regard to social solidarity and empowerment—also needs to be measured consistently. Participants will need to agree on consistent sanctions for breaches of mutually agreed climate measures and consistent rewards for implementation of these measures. Additionally, procedural fairness involves inclusive decision-making—that is, considering diverse perspectives to foster a sense of belonging and shared ownership of decisions, leading to increased solidarity among participants. When individuals perceive that their perspectives are valued, they are more likely to collaborate cohesively.
Distributional fairness refers to the equitable contributions and benefits from collective action. This means that there must be broad agreement that all participants may be expected to benefit from the collective action, and additionally that contributions correspond to the ability to contribute and benefits correspond to need. It is important to create a sense of justice and trust among participants. This promotes solidarity, as individuals perceive that everyone is treated with equity and respect and feels valued and included.
Multilevel Agency (A)
The second principle of the normative revolution in international affairs is the recognition that multilateral cooperation requires participation at both the macro and micro levels of the decisionmaking process. Those who are affected by a global challenge and the requisite responses to it should have a role in shaping policy decisions. The ends and means of global governance should emerge from a fair and inclusive decisionmaking process, in which power and authority are devolved, to the greatest degree possible, to communities and citizens who will feel the impact of these decisions. When individuals actively contribute to shaping policies that affect them, they have a greater sense of agency. From the exercise of agency in multilateral cooperation, a sense of solidarity can emerge as nations work together toward common goals.
The same principle should hold at the subnational level as well. This approach recognizes that small social groups typically are the building blocks of human collaboration, and successful cooperation at higher levels involves collaboration among these basic constituents of social interaction. The principle is also consistent with the principle of subsidiarity, or the idea that decisions should be made at the most local or decentralized level possible to give communities a say in policies that directly impact their lives, only moving to higher levels of authority when lower levels cannot adequately address the issue.
More generally, decisions made at lower levels need to be framed in a manner that is consistent with and complements higher-level decisions required to achieve global goals. Creating structures and mechanisms to link the local to national and global decisionmaking processes is one of the core challenges of global governance. Unfortunately, many current economic, political, and social structures are not in fact participatory. Governments of so-called representative democracies are no longer truly representative, as most citizens are no longer involved in designing and implementing the rules by which they must live. Political leaders and policymakers usually respond to problems by handing down centrally planned solutions based on generic diagnoses, rather than involving their citizens in policy deliberations. Business leaders are sensitive to their customers and occasionally to their other stakeholders, but do not necessarily act in the spirit of participation for the common good. Sometimes that sensitivity is limited to influencing customer tastes and exploiting their cognitive biases through advertising and attention capture in digital networks.
Establishing truly participatory global governance will require establishing new incentives and operating conditions that promote not only the involvement of local groups in crafting local rules and policies but also collaborative relationships among local groups in the formulation of higher-level national and international policies. The way to achieve this outcome is through “polycentric governance,” which connects small social groups into a network involving larger-scale entities, including institutions, organizations, and other higher-level actors that work together to address common challenges. Each decisionmaking center within the network can make and enforce rules within its jurisdiction. The interactions within the network enable local autonomy, foster collaboration across governance levels, and help coordinate the network at all levels. This framework recognizes the importance of diversity in institutions, decisionmaking authorities, and governance arrangements to address the world’s many collective challenges on various scales.
In practice, polycentric governance involves creating harmonious systems of agency. Though climate change is a global problem, international policy responses are not the only point of action. If climate policies were a purely top-down affair, then this policymaking would be remote from the people on the ground who must implement the relevant policies. Without their active participation, consistent climate policy around the world becomes impossible. On this account, every global problem must also be understood as a private problem, involving each relevant individual within a policymaking order. Polycentric governance aims to achieve this collective action.
The starting point is making room for local autonomy. By empowering small social groups and communities to manage their own resources and make collective decisions that directly affect their lives, polycentric governance allows for context-specific solutions and fosters a sense of ownership and responsibility among community members. To deal with climate change, the global community must agree on a common climate goal; however, local communities must be allowed to design their own paths toward this shared objective, in line with their own geographic, political, social, and economic circumstances.
Polycentric governance also facilitates learning and adaptation by allowing for experimentation, flexibility, and the ability to adjust governance approaches based on feedback and changing conditions, enabling continuous improvement and innovation in the management of collective goods. With respect to climate change, for instance, climate policy involves running innumerable policy experiments toward the common global goal, operating through knowledge-sharing networks that communicate best practices. Such networks generate bottom-up agency in line with the top-down agency of international climate policymakers. In situations where approaches are in conflict, institutions are required to promote negotiation and conflict resolution both within and across levels.
Redirecting Gain from Production and Consumption (G)
In the existing global economic system, the legal duties of company directors are not aligned with the promotion of environmental sustainability or broadly shared social prosperity. Indeed, their fiduciary responsibility to promote shareholder value frequently runs counter to the preservation of the environment and flourishing communities. Climate change poses enormous risks—including for businesses themselves—that currently accepted standards are not able to adequately measure or report.
To make the pursuit of profit consistent with the interests of people and the planet, business incentives and operating conditions must be reformed to ensure that profit cannot be earned at the expense of environmental sustainability and social cohesion. Business incentives are influenced by taxes and subsidies, as well as incentive schemes for public-private partnerships and coinvesting. Business conditions can be shaped by such factors as environmental and labor standards; new fiduciary and legal responsibilities for business owners and boards of executive and nonexecutive directors; government regulations; constraints on companies’ specifications of their corporate purpose and governance frameworks; and government procurement contract conditions that are consonant with the shared global goals. Analogously, consumption needs to be redirected so that the benefits of consumption do not come at the expense of social and environmental prosperity. This can also be done by reforming the incentives and operating conditions that consumers face.
Regenerating the Environment (E)
A final principle for the normative revolution in international affairs is to ensure that all international policymaking, regardless of whether it is concerned with climate action, is consistent with the stability of the natural world. Currently, government policies and business activities contribute to the destabilization of Earth’s natural systems, endangering the wellbeing of future generations of all living things. The regeneration of our natural environment must become a ubiquitous aspect of all economic, political, and social decisionmaking. What this means in practice will vary from country to country, as different environmental conditions call for different forms of regeneration.
Regarding climate change, environmental regeneration requires mobilizing every country’s economic, political, and social capacities appropriately. For example, economic capacities can be mobilized through investment in renewable energy sources to reduce greenhouse gas emissions, or through green finance such as green bonds, sustainable investment funds, and carbon pricing. Potential political capacities might involve international cooperation to implement agreements on climate action (such as the Paris Agreement), supported by energy efficiency standards and a regulatory framework. Social capacities might best be directed to raising public awareness about climate change and its impacts, as well as educational initiatives, media campaigns, and community outreach programs.
From Principles to Practice
The aim of the SAGE principles is to provide general guidelines for future rules and institutions for an economic system in which progress in the economic domain is matched by progress in the social and environmental domains. Regarding climate action, these principles have, among other things, the following concrete implications:
- First, graduated rewards and sanctions should create a protective policy wall, ensuring those who adhere to the agreed climate action do not suffer a competitive disadvantage relative to free riders. The underlying international policy framework is meant to provide a level playing field for business competition in pursuit of profit and eliminating undesirable arbitrage opportunities (such as carbon leakage).
- Second, climate policies must be accompanied by fast and fair conflict resolution mechanisms, with the help of trusted, impartial mediators.
- Finally, financial and technical support from developed countries is required to address the underinvestment in the transition to the low-carbon economy, climate resilience, and protection of nature. Institutional structures will be required to bring together key stakeholders in order to promote financing for global climate action.
The normative revolution in international affairs calls for the recognition that addressing global problems such as climate change is a social concern, as well as a concern for international institutions and national governments. Climate policy must go beyond purely economic targets formulated by politicians, economists, and lawyers, aimed at climate goals formulated by natural scientists. Effective policymaking must also include measures that mobilize societies, because the effectiveness of climate action depends significantly on how well solidarity and agency can become its drivers. Only when solidarity, agency, material gain, and environmental regeneration all pull in the same direction can a SAGE approach to multilateral cooperation become reality.
Dennis J. Snower is president of the Global Solutions Initiative in Berlin; a fellow at The New Institute; a professorial fellow at the Institute for New Economic Thinking, Oxford University; and a nonresident fellow at Brookings. Previously, he was president of the Kiel Institute for the World Economy. He is an expert on labor economics, socioeconomics, public policy, and inflation-unemployment tradeoffs. He is currently working on a new paradigm for economics with David Sloan Wilson. He is the author of a major report on digital governance with reform with Paul Twomey.
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