The Game Theory of Climate Change
Climate change is a global issue that we are constantly reminded of everywhere and everyday. Yet why has the change needed to solve it been so slow and reluctant? No, it is not because humans are irrational and lack the ability to understand the weight of such an impending issue. On the contrary, it is because humans are highly rational and when considering the issue of Climate Change using Game Theory, it can be seen that the majority of strategies in favour of it are disadvantageous.
Whether considering a matrix with each player representing a country, company or individual, the strategies to reduce Climate Change are always at a disadvantage. In a game with players representing countries, the scenario can be compared to the Prisoner’s Dilemma. Players rely on trust as betrayal will lead them to the worst payoff. In this game, the best response and most rational choice is always to betray the other players. The same can be seen for companies and individuals – it is always more self-advantageous and easier to betray the trust of the other players. Furthermore, as more people choose the ‘betrayal’ strategy, the more disadvantageous those choosing to trust will be.
So how can we solve this issue? We have to focus on making the choice of ‘trusting’ more attractive and the other choice less so. Firstly, by increasing the incentive to do the right thing, this increases the strategy’s payoff and can help influence more players to choose this strategy. Or, instead, by increasing the penalty for betrayal, this decreases the overall payoff of that strategy and so increases choices of the trust strategy. Lastly, by making choices visible, this can also provide a sense of safety to players and provide confidence in them to make the right decision as well as penalise players who betray others. NASA has introduced this last solution through its satellite monitoring global carbon emission; this allows countries to see whether others are truly upholding their choice and so can help countries feel more willing to trust them and choose strategies that are less self-advantageous.
https://medium.com/climate-conscious/why-nobody-cares-about-climate-change-2bd7457057ae