Game Theory in Climate Negotiations
President Donald Trump announced that the US was withdrawing from the Paris climate agreement in June. According to the article “Game Theory and Trump’s Climate Negotiations” by Mohamed A. El-Erian on Bloomberg, the persistence on this action would not only hurt the long-term benefits of US, but also damage the global construct. As Trump announced, the US would not rejoin unless the terms in the accord were renegotiated in the favor of US. Many signatories of the accord disagree with the negotiation. As a result, the original balanced and cooperative global relationship would be altered.
Let’s analyze this in game theory. For the US, it could act in either cooperative way or uncooperative way. For the rest of the countries, they also could act either of the two ways. When the US and other countries all choose to be cooperative, they both get long-term interests, which will be eco-friendlier. However, if the US chooses to act uncooperatively while the other nations act cooperatively with the accord, the US gains more short-term benefits by “free-riding on the climate commitments of others, minimizing its own financial contributions, and retaining wide flexibility on how it promotes and uses its energy resources.” In the long run, the benefits brought by the agreement would be greatly undermined without the participation of the US. Though the rest countries can still follow the accord, the cooperation is not good enough to reach the goal of the agreement without the US. Mentioned in the article, the decision of President Trump led the countries into a “prisoner’s dilemma” –if the US and the other countries can trust each other and act accord to mutual benefits, both parties gains long term benefits. Yet, if one country only shoots for its own interest, the result for both parties will be worsened. Dismantling the agreement is an action that threatens the global environment and harms the collective interests from the perspective of Game Theory. Yet, the countries need to figure out a way to cooperate with each other to face the new reality.
Source:
https://www.bloomberg.com/view/articles/2017-06-02/game-theory-and-trump-s-climate-negotiations