The establishment of international environmental institutions is often predicated on the assumption that cooperation is politically feasible and that regime formation is viable. However, the provision of many environmental services remains vulnerable to asymmetries in interests that impede both cooperation and adaptation. We examine governance structures that internalize externalities under asymmetrical conditions aggravated by abrupt and/or significant changes in political circumstances (in this context, the eruption of political violence which, in this article, we refer to as political variability). We analyze the change over time in Israel’s strategies for stream and river rehabilitation undertaken as a response to continued runoff of wastewater from Palestinian territories. We find that abrupt political changes that negatively affect relations among the parties undermine the foundations for cooperative solutions. In the Israeli-Palestinian case, Israel has responded by adopting a position of “unilateral environmentalism.” Such a non-cooperative policy was deemed the best possible option for addressing the transboundary pollution problems, in stark contrast to the model of cooperation that underlies most IEAs. Yet, we find that while unilateral environmentalism may safeguard a country’s immediate political and environmental interests, it also entails various risks in the medium and long term.