Financing environmental policies in the South: an analysis of the Multilateral Ozone Fund and the concept of Full Incremental Costs

The »Montreal Protocol on Substances that Deplete the Ozone Layer« obliges industrialised countries to reimburse developing countries — through new and additional resources — all agreed incremental costs incurred by them in their efforts to save the ozone layer. To this end, a Multilateral Fund was established in 1990. The Fund's decision-making procedures grant developing countries the same voting powers as industrialised countries — an almost revolutionary precedent in North-South relations. In this paper, the work of the Multilateral Ozone Fund since its inception is being analysed, with special emphasis on the development and implementation of the notion of »all agreed incremental costs« between industrialised and developing countries. Since comparable institutional settings have been stipulated in the more recent treaties on climate change and biological diversity, the paper's concluding section draws five »lessons« from ozone politics for other international environmental agreements, in particular the emerging climate regime.