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Global Policy

The Prisoners's Dilemma

Any international climate agreements faces the prisoner's dilemma. Resolving this dilemma is the main obstacle to effective cooperation.

Fortunately, how the design of such agreements affect th propensity of players to cooperate has been studied for 50 years, in real-world situation, experiments and theoretically.

Unfortunately, all of this has been ignored by climate negotiators. In fact it does not even appear that they are aware the science of strategy exists.


 Climate Games:  Why Nations Cooperate, ... or Don't

For 15 years, the plan has been: "Every country must have a cap. That is the only path to certainty." If only one strategy is possible, why discuss strategy? So they didn't. Instead they fought over the level of caps.

The idea was that science and math would give the answer. But caps can add up to the same answer in many different ways, and science says nothing about how to divide up the rights and responsibilities. But as Joseph Stiglitz pointed out, caps are a way of assigning rights to the atmosphere, and "There is no set of generally accepted principles for allocating rights to usage." As he predicted in 2006, no solution was found to this problem.

Because caps are so contentious, countries were not willing to make "legally binding" mean anything. So as Obama said, "Kyoto was legally binding and everybody still fell short anyway."

Cooperation is the key. And that requires (1) a fair assignment of efforts, and (2) an enforcement mechanism -- carrots and sticks -- that will keep countries cooperating. With proper design of the rules, the tendency of countries to defect can be replaced with a tendency toward cooperation.

 Why Kyoto Failed:  A Strategic Analysis

The Kyoto Protocol assumed cooperation and focused on emissions math. This resulted in several incentives that worked against cooperation. These proved highly effective.

  • Rich countries were given no incentives to meet their caps.
  • Poor countries had no obligations
  • Poor countries were allowed to profit from helping rich countries meet their caps.
  • "Allowing a country high emission levels is tantamount to giving it money." --Stiglitz
The entire design pitted poor countries against rich countries.  

 Beyond Kyoto:  A Better Climate Commitment

Focusing on cooperation rather than "math," reveals that committing to a single global carbon price, instead of to 100 national emission caps, offers a far better hope for a strong international policy. Even so, a Green Fund will be required, and it is best based on another type of carbon pricing -- one that is more fair, and provides additional emission-abatement incentives. (Summary of the global-carbon-pricing proposal)

 Energy / Climate:  Energy Security Can Motivate Stronger Climate Policy

The US and China (also Japan, the EU, etc.) are addicted to oil, and seek protection from oil-price shocks. The most powerful protection (demonstrated during the OPEC crisis) is demand reduction. The point of climate policy is to reduce the demand for fossil fuels. Since these policies align, we should make use of that to further cooperation.