Can game theory help solve the problem of climate change?
The solution to mitigating climate change could be found using game theory. Global warming is a direct result of carbon emissions from human activity. Carbon emissions can be viewed as a common-pool resource. All humans have the ability to produce carbon dioxide, and if limited, it can be produced sustainably. However, the activities that generate carbon emissions produce wealth which has led our society to over-utilize this resource and cause it to collapse. Such a collapse is known as the “tragedy of the commons”.
The solution to global warming is to incentivize limiting carbon emissions. One strategy is to start small and work up. If like-minded people in a small group who are able to build trust and systems of reciprocity with one another can agree to limit their carbon emissions, then this could lead to larger and larger agreements until a tipping point is reached and limiting emissions becomes a social norm. However, this may not be a strategy likely to succeed, because wealthy industrialized nations, the ones who have the most impact on climate change, are also the most equipped to deal with the consequences of global warming. Developing nations will bear the brunt of climate change. Another strategy that is not mentioned in the article, but that I think would be more effective, would be for governments to step in and implement a top down approach rather than a bottom up approach as previously mentioned. If carbon taxes were implemented, then a new equilibrium emissions rate could be reached that is sustainable. A carbon tax could operate in a similar way to how tolls affect the routes people choose to get between two cities. The tax could deter more people from burning fossil fuels because it would cost them more to do so.