Climate Change & Game Theory
“NC passed a law against global warming science, therefore it’s not happening. So I’m ignoring Twitter’s 140-character limit, so it’s not happ”
-Stephen Colbert
“Humanity faces many threats but none is greater than climate change.” he said. “In damaging our climate we are becoming the architects of our own destruction. We have the knowledge, the tools and the money (to solve the crisis).”
-Prince Charles of Britain
The two quotes above in response to climate change show how opposing beliefs can be an impediment to progress. If we think about climate change in terms of game theory, with each player being a different country, it can be difficult to reach a Nash Equilibrium, in which two countries implement strategies that are best responses to each other. In a standard two player game, it takes both of the players to play the Nash strategy and reach an optimal state of equilibrium. Let’s say we construct a standard two player game with the United States and China, the two largest contributors of CO2 induced climate change. The two strategies would be either choosing to ban CO2 emissions or to not take any action on CO2 emissions. If the United States decided to implement a law banning industrial businesses’ from emitting carbon, the Nash strategy would be for China to ban CO2 as well because both countries would be better off by doing so. If China chose not to reduce emissions because as one of the largest producing countries they don’t want to slow manufacturing to prevent climate change, then the United States would lose this game although they chose the Nash strategy. They would lose because they would have had to decrease industrial production and they would not have reduced CO2 emissions enough to make a difference as a singular country. This is shown in a real life example when Obama stated that “As the leader of the world’s largest economy and the second largest (greenhouse gas) emitter … the United States of America not only recognises our role in creating this problem, we embrace our responsibility to do something about it.” In this statement he phrases climate change in such a way that reducing it will always be our dominant strategy. For other countries, however, it is not that concrete. Without studying game theory world leaders don’t understand the importance of finding Nash Equilibrium over the strategy that might individually benefit them the most. Because of other factors such as, income from the industrial manufacturing economy, widespread motor transportation, and more, countries’ ideas about what their best responses should be are confused. This is what has caused somewhat of a stalemate in progress toward reducing climate change. Some countries will make an effort, while others won’t, but the only way for everybody to win (eliminate climate change) is for everyone to play their Nash strategies.