Game Theory and the UN Climate Talks
Game theory is an important tool used in a variety of fields. It is used to address situations in which outcomes of a person’s options depend both on their decisions and the decisions of the other people with whom they are interacting. Some of the fields that game theory is used in include economics, political sciences, sociology, psychology, and even biology. However, one area that I did not expect to see game theory in was in the world’s response to climate change. The United Nations Climate Change Conference will be taking place in Durban, South Africa from November 28 to December 9 later this year. Some German academics are proposing using game theory (on a national level) as a way to make progress on the talks.
John Heitzig, the lead author of the study, suggested that “free-riding” countries are causing problems for the other countries that want to act against global warming. These free-riding countries are defined as nations that want to continue to emit CO2 with no restrictions while other countries are forced to make tougher choices for the future. In terms of the game theory that we learned in class, the players in this game are the various countries. Each country has two different strategies – they can either limit their use of CO2 to help fight global warming or they can continue to emit CO2 and let other countries do the work for them. This game really gets interesting when we take a look at the various payoffs.
In this game, I think it would be useful to split the payoffs for the individual countries into two different categories: short-term payoffs and long-term payoffs. First let’s assume that a majority of countries are limiting their use of CO2. If this were the case, then the best response would be to continue to emit CO2 at the normal levels. It would allow the country to have the short-term benefit (no adverse economic impact from limiting CO2 emissions) along with the long-term benefits (a more stable climate in the future). The scientists in the study are suggesting that adding a negative payoff to not limiting CO2 could change this. The example given in the article talks about a country that goes over in its CO2 emission quota in a commitment period. This allows the other countries to deviate by a certain amount from their quotas too. This basically removes the long-term benefit from all countries, including countries that don’t limit their use of CO2.
Although this idea makes sense in theory, I have to agree with the writer of the blog post on the Guardian website. I don’t think that it would work. For example, look at the case of a country like the United States. There are a significant percentage of people in the country who either do not think that climate change is really occurring or who do not take climate change very seriously. This means that the country as a whole would not act rationally in terms of climate change, as the author of the Guardian blog article says. This would probably also be true in several other countries around the world where not everyone agrees with climate change or where the government sees short-term economic benefit as more important.
http://www.guardian.co.uk/environment/blog/2011/sep/06/game-theory-un-climate-talks
http://www.ippmedia.com/frontend/index.php?l=33663