FEATURE

The Next Move for Planet Earth

What game theory can teach us about climate-change negotiations.

by Claudia Dreifus Published Winter 2015-16
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How exactly does that work?

By looking at a treaty as a game, we can see whether it will be effective and why. For example, will a new agreement at the upcoming United Nations climate-change conference in Paris actually cause countries to reduce their emissions? It is hard to know in advance. It will even be hard to know years after the treaty has been adopted and implemented. This is because we won’t be able to observe what countries would have done without the agreement. 

Game theory allows us to see how countries might behave with and without the treaty. It is a structured way of imagining.
 

Scott Barrett / Photographs by Jeffrey SaksWith Astrid Dannenberg, a former Earth Institute fellow who now teaches at the University of Kassel, in Germany, you created a laboratory-based game simulating some of the human dynamics likely to come into play in Paris. Can you describe what you did, please.

Our game is meant to capture the essence of climate change negotiations. At the real Paris meeting, nearly two hundred sovereign nations will make pledges for how much they’ll reduce their greenhouse-gas emissions. In doing so, they will be guided by their collective goal to limit global temperature change to two degrees Celsius above pre-industrial levels. That’s the ceiling that these countries have agreed is necessary to avoid what they term “dangerous” climate change.

The way our game works is that players are allotted stacks of poker chips worth a few Euros, which they can contribute to a central pot. They are at liberty to contribute as many or as few chips as they want. The cash award they get at the end of the game depends on how many chips they and their fellow players contribute. It also depends on whether the total number of chips exceeds a certain threshold that isn't disclosed to the players. At worst, a player may end up with no award; at best, he or she might get close to €40. Players get more by holding onto their chips, but if the threshold isn’t reached, nobody gets the big prize. This threshold is supposed to represent the catastrophic outcome of “dangerous” climate change. If countries contribute so little that they allow dangerous climate change to happen, the global community as a whole loses, and the biggest individual losers will be those who made a good-faith effort to save the world by contributing lots of their chips while others stood idly by, hoarding theirs.

We find that most individuals are inclined to cooperate. But when the group observes one or two players failing to contribute many chips, a kind of collective cynicism sets in, and group cooperation collapses. Then everybody loses.
 

How do the real climate-change deliberations in Paris fit into your laboratory scenario? 

You can think of the pledges that countries will make in Paris as analogous to the pledges individuals make in our game. Pledging to reduce emissions is like pledging to contribute poker chips. In both cases, contributions are voluntary. However, one novel aspect of this new treaty is that it will make it easier for countries to review each other’s pledges and eventual contributions. Every country will be able to see whether similar countries are making comparable pledges, whether the totality of such pledges will achieve the global goal, and whether, over the coming years, the pledges made by individual countries are actually met. It will also provide an opportunity for countries to express their approval, or disapproval, of the pledges and actions of individual countries. There is optimism among diplomats, environmentalists, and other observers that this process of naming and shaming will yield better results than did previous climate treaties.

In our most recent experiment, therefore, we included new stages in the game-playing. We wanted to see how individuals would play the game if at the start they each had to announce to the group how many chips they intended to contribute, and if, over the course of the game, all the players could observe how many chips each player had contributed so far. What we found is that this affected what individuals said they would do. They did increase their pledges. But it didn’t affect what they actually did. In fact, every time we ran the simulation, the players fell short of reaching their collective goal.

These games help me understand why we’re messing up. And how we can do better.
 

Based on your research, what do you see happening in Paris?

I think it’s very likely that a treaty will be adopted and that it will include pledges to reduce emissions and some kind of review process. There are draft texts circulating now, and that’s what they look like. However, both the reductions and the review will be voluntary, and my research predicts that this won’t be enough to change how countries actually behave.

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