Preventing Climate Change: GameTheory in International Climate Politics

Item Type text; Electronic Thesis

Authors Lucas, Natalie Rose

Publisher The University of Arizona.

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Download date 10/07/2018 04:57:06

Link to Item http://hdl.handle.net/10150/297705

Abstract:

Climate change is a focus of policy debate throughout the world, including

international forums a such as United Nations. Despite the great attention given to

climate change, little in the way of collective international policy has been forthcoming.

This thesis provides a game theoretic analysis of the current lack of international policy.

No effective policy is apt to emerge unless everyone comes together to make drastic

reforms to policies that affect climate change across the world. This thesis goes into

detail as to why, internationally, we are stuck in a suboptimal equilibrium (as in the “stag

hunt” game ) in climate change negotiations. It then offers several conclusions as to how

the game can be solved in order for this problem to have resolutions.

Introduction:

Climate change is an issue that has worldwide implications, and affects

communities across the globe. In Darfur, drought has ensued for years, and because of

this drought, people can no longer feed and water their camels in traditional areas.

Nomadic tribes have begun to fight for the land with the best feeding areas so they can

continue to survive and work. In 2007 Castiglione de Cervia, Italy witnessed the outbreak

of chikungunya, a relative of dengue fever, which was caused by soaring mosquito

populations that are now able to breed in the area because of the warmer temperatures. It

was the first outbreak of a tropical disease in Europe as a result of climate change. Island

nations, such as Kiribati have been losing land due to rising sea levels, which can be

attributed to rising temperatures. Agriculture, forests, watersheds, and many other

ecological systems are being affected in very drastic ways by the changing climate of the

planet.1

Not all the results of climate change are negative for all communities. For

example, in some areas, such as in northern territories of Asia, warmer temperatures will

increase growing seasons. 2 The problem with climate change is it alters the average

temperature of the globe overall, and these relatively abrupt temperature alterations create

rapid ecological changes as well as increases the likelihood of severe weather events.

This alters ecosystems around the world that people depend on for their survival and

economic productivity. Additionally, it creates unpredictable situations that humans and

1Faris, Stephan. "Top 10 Places Already Affected by Climate Change." Scientific American. Scientific American, 23 Dec 2008. Web. 15 Mar 2013. <http://www.scientificamerican.com/slideshow.cfm?id=top-10-places-already-affected-by-climate-change>. 2Rosenberg, Matt. "Advantages and Disadvantages of Global Warming Positive and Negative Effects of Global Warming to People and the Planet."Geography. About.com, 4 Apr 2010. Web. 15 Mar 2013. <http://geography.about.com/od/globalproblemsandissues/a/advantages.htm>.

the environment have problems adapting to fast enough to minimize the impacts that

climate change could have.3 The negative effects of climate change outweigh the positive

effects because of the inability for the world, humans and the environment, to adapt fast

enough to the changes that are happening as a result of climate change.4

Because this is a very serious global issue with many consequences, the United

Nations (UN) is working to take action to mitigate some of the effects of climate change.

To do this, countries in the UN need to collaborate to create international policy that

addresses this issue in multiple sectors of governmental and private organizations in order

to make the impact that is needed to stunt and stagnate unnatural climate change

processes. Although, some countries are already doing this outside of the UN framework,

installing standard goals and expectations worldwide will hopefully encourage more

change across countries. In this thesis I will discuss why climate change is a collective

action problem that needs to be addressed in an international forum, the theoretical game

that is associated with this issue, and how to get to the optimal results from this game.

Additionally, I will identify the practical application of this theory through a discussion

of international policy that has been successful such as the Montreal Protocol, which was

the prevention of atmospheric ozone depletion, and the current issue at hand, climate

change.

Background Information:

3Shah, Anup. "Climate Change and Global Warming Introduction." Global Issues Social, Political, Economic and Environmental Issues That Affect Us All. Global Issues, 5 Mar 2012. Web. 15 Mar 2013. <http://www.globalissues.org/article/233/climate-change-and-global-warming-introduction4World Health Organization, "Climate change and health." Last modified Oct 2012. Accessed April 13, 2013.

Cause of Climate Change:

Climate change, according to the United States Environmental Protection Agency,

is “any significant change in the measures of climate lasting for an extended period of

time. In other words, climate change includes major changes in temperature, precipitation,

or wind patterns, among others, that occur over several decades or longer.”5 Climate

change is a natural occurrence, and can be influenced by volcanic eruptions and

variations in the sun’s energy. However, human activities have increased the rate that the

climate changes significantly compared to the natural rate of change, which is why it is

becoming a problem. When the climate changes naturally the environment has the ability

to respond to it because the change of the climate comes at a much more steady pace. The

environment has a harder time changing quickly to the human induced climate change, as

it needs to in order to conserve its systems. 6

Human-induced climate change is caused by excessive greenhouse gases

produced by humans that trap heat from the sun in the atmosphere, which then raises the

average temperatures around the world. Greenhouse gases that do trap heat in the

atmosphere include carbon dioxide, methane, water vapor, nitrous oxide, and ozone. The

green house gases that humans contribute the most of, and the cause the most concern are

carbon dioxide, nitrous oxide and methane.7 The energy from the sun enters the

atmosphere as waves of heat. The heat is first absorbed as much as possible by the

landmasses and the oceans of the globe. The remaining heat that could not be absorbed

5"Glossary of Climate Change Terms." Environmental Protection Agency. Environmental Protection Agency, 14 Jun 2012. Web. 25 Sep 2012. <http://epa.gov/climatechange/glossary.html>. 6US Environmental Protection Agency, "Causes of Climate Change." Last modified 2013. Accessed March 30, 2013. http://www.epa.gov/climatechange/science/causes.html.7US Environmental Protection Agency, "Causes of Climate Change." Last modified 2013. Accessed March 30, 2013. http://www.epa.gov/climatechange/science/causes.html.

by land or water is then returned back into the atmosphere. There are molecules in the

atmosphere that do not let that heat escape, which are the greenhouse gases. These

molecules act like a like a blanket. The more molecules that are in the air the more heat

the atmosphere can trap. Essentially, by adding to the greenhouse gases, humans are

creating a thicker blanket that does not allow heat to escape the atmosphere, and so the

Earth warms overall. 8

The greenhouse gases that

are coming from human production

worldwide come from a variety of

sources. The primary human

activity that contributes to

greenhouse gases is energy

consumption according to the World

Resources Institute. Approximately

61% of the greenhouse gases produced by humans comes from energy use, which

includes the energy that is used for cars, lighting up buildings, industry, mining, and

refining natural resources. The other 39% of greenhouse gas production by humans

include land use change such as deforestation, waste decomposition, industrial processes

and agriculture.9

8National Geographic, "Global Warming- Education." Last modified 2013. Accessed Sept 28, 2012. http://education.nationalgeographic.com/education/encyclopedia/global-warming/?ar_a=1. 9Herzog, Tim. World Resources Institute, "Greenhouse Gases and Where They Come From." Last modified 2006. Accessed March 30, 2013. http://www.wri.org/stories/2006/10/greenhouse-gases-and-where-they-come-from.

Herzog, Tim. World Resources Institute, "Greenhouse Gases and Where They Come From."

According to the World Meteorological Organization, since the industrial

revolution carbon dioxide concentrations in the atmosphere have risen 140% from 280

parts per million (ppm) to 390.9 ppm. Approximately 375 billion tones of carbon have

been released into the atmosphere as a result of human activity since that point of time,

primarily from the combustion of fossil fuels such as oil, coal, and gas. Nitrous oxide, a

greenhouse gas that not only traps heat 298 times more effectively than carbon, but also

deteriorates the atmospheric ozone layer; is 120% above preindustrial levels at 324.2

parts per billion (ppb). Nitrous oxide gases come from biomass burning, fertilizer use,

and industrial processes. Finally, Methane, a gas that comes from cattle breeding, fossil

fuel exploitation, and landfills has increased 259% since preindustrial levels reaching

1813 ppb.10 The excess captured heat that is a result of these greenhouse gases that

humans have contributed to the atmosphere has raised global temperatures 0.8° C on

average according to the National Aeronautics and Space Administration (NASA) Earth

Observatory thus far.11

With just a 0.8° C increase in average global temperature, the consequences of

climate change can already be seen, as was illustrated in the introduction. However, it is

predicted that the conditions will get worse across the globe unless humans and the

environment respond quickly to the changing planet. The Intergovernmental Panel on

Climate Change (IPCC) predicts with a global mean temperature increase of 1-3° C

above the 1990 levels that North America will experience decreased snowpack in the 10Nullis, Clare. World Meteorological Organization, "Greenhouse Gas Concentrations Reach New Record." Last modified 2012. Accessed March 31, 2013. http://www.wmo.int/pages/mediacentre/press_releases/pr_965_en.html. 11Przyborski , Paul, and Warren Wiscombe. "Features."Earth Observatory. National Aeronautics and Space Administration, n.d. Web. 28 Sep 2012. <http://earthobservatory.nasa.gov/Features/WorldOfChange/decadaltemp.php>.

western mountains and increased frequency, intensity and duration of heat waves. Latin

America will see tropical forests replaced by savannah, species extinction, and changes in

water availability for human consumption and agriculture. Europe will see an increased

risk of floods, glacial retreat, and extensive species loss. Africa is predicted by 2020 to

see between 75 and 250 million people to be exposed to water stress and agricultural

production will be significantly hindered. Finally, in Asia freshwater availability is

projected to decrease and flooding in coastal areas is expected to increase.12 These are

very general predictions for large areas of land, and although they will not affect

everyone they will have a significant impact on human health, the construction and

destruction of cities, and the health of ecosystems around the globe.

History of International Negotiations:

Climate change, and greenhouse gas reduction is a relatively new problem that the

United Nations has introduced into its international forum. The IPCC first brought the

issue of climate change to the world stage to be acted upon by the international

community in 1990. The World Meteorological (WMO) Organization and the UN

Environmental Program (UNEP) created the IPCC in 1988. This sector of the WMO and

UNEP was tasked to research rapid global warming as an anthropogenic consequence in

order to confirm its validity in the scientific community, as well as to determine what

could be done about the problem. The IPCC determined that rapid climate change was a

consequence of human activities, and that it could have many negative consequences if it

12Jenkins, Amber. National Aeronautics and Space Administration , "The current and future consequences of global change." Accessed March 31, 2013. http://climate.nasa.gov/effects.

was not acted upon. The United Nations introduced a forum to discuss possible solutions

in the international community in 1991.13

The IPCC is made up of 195 member countries, and it is a group of scientists that

make up the leading international body for assessment of climate change. Scientist all

over the world perform assessments and experiments for the IPCC to obtain a clear

understanding of how humans influence climate change in order to keep it nonbiased and

diverse in the findings.14 The structure of the IPCC includes volunteer scientists all over

the world that are guided by outlined principles and procedures supported by the IPCC

secretariat. The IPCC has three working groups that focus on different aspects of climate

change to do these assessments. These working groups are physical science basis climate

change, climate change impacts adaptation and vulnerability, and mitigation to climate

change. This group helps develop assessments that the UN Framework Convention on

Climate Change uses for their negotiations as well as their proposals when trying to

develop solutions to mitigate climate change.15

When the negotiations began in 1991, several institutions were established by the

UN to help facilitate the creation of international policy around the issue of climate

change. First, the UN Framework Convention on Climate Change (UNFCCC) was

13King, David, Kenneth Richard, and Sally Tyldesley. "International climate change negotiations: Key lessons and next steps." International climate change negotiations: Key lessons and next steps. University of Oxford, July 2011. Web. 2 Aug 2012. <http://www.smithschool.ox.ac.uk/wp-content/uploads/2011/03/Climate-Negotiations-report_Final.pdf>. 14 "Organization." Intergovernmental Panel on Climate Change. UN Environmental Program and and World Meteorological Organization , 2012. Web. 2 Aug 2012. <http://www.ipcc.ch/organization/organization.shtml 15"Structure." Intergovernmental Panel on Climate Change. UN Environmental Program and and World Meteorological Organization , 2012. Web. 2 Aug 2012. <http://www.ipcc.ch/organization/organization.shtml

established in 1992.16 This Convention was founded in an international treaty so that the

UNFCCC could consider and propose options as to what to do about climate change on

an international level.17 The UNFCCC is supported by several structures that foster the

dialogue between the countries that participate in the UN to develop solutions. The

UNFCCC secretariat oversees these structures, and ensures that decisions made in the

negations are upheld by the parties that participate and agree to them. The primary

structure that supports the dialogue between countries to create solutions to address the

issue of climate change is the Conference of the Parties (COP). The COP has two

different bodies, the convention bodies, which work on cooperative action and adaptation

strategies and the Kyoto protocol body, which monitors counties, and helps monitor

compliance to the protocol.18

The COP has an annual conference that takes place in a different location around

the world each year. At these conferences, treaties can be created and signed, and

countries can initiate discussion on what issues they believe should be addressed to

mitigate climate change. Between the large annual conferences there are intermediary

sessions to discuss and create policy to be presented at the COP in Bonn, Germany. A

myriad of issues are discussed and collaborated upon to attempt to create solutions to

prevent climate change. These issues range from technology transfer so developing

16King, David, Kenneth Richard, and Sally Tyldesley. "International climate change negotiations: Key lessons and next steps." International climate change negotiations: Key lessons and next steps. University of Oxford, July 2011. Web. 2 Aug 2012. <http://www.smithschool.ox.ac.uk/wp-content/uploads/2011/03/Climate-Negotiations-report_Final.pdf>. 17"Essential Background: The International Response to Climate Change." United nations framework convention on climate change. United Nations Framework Convention on Climate Cha, 2011. Web. 1 Aug 2012. <http://unfccc.int/essential_background/items/6031.php>. 18"United Nations Framework on Climate Change Bodies." UN Framework Convention on Climate Change. UNFCCC, 20004 . Web. 1 Aug 2012. <http://unfccc.int/bodies/items/6241.php>.

countries can avoid excessive greenhouse gas release from their development, to finance

so that countries that need resources to upgrade their technologies to reduce their

greenhouse gas emissions can find a way to do so, to reduction of emissions from

deforestation and degradation otherwise known as REDD. Through discussions in

subgroups and subsidiary bodies policy can be created to address the issues that are

necessary to mitigate climate change.19

The first issue that the conference wanted to address was to significantly reduce

carbon emissions. Although nitrous oxide and methane are both very potent greenhouse

gases, and should also be addressed and mitigated, carbon dioxide is being released at a

much more rapid rate and in quantities that have significant influences on global warming

overall. It is the greatest contributor to the climate change problem that humans

contribute to at this point of time.20 An attempt was made in 1995 to create a treaty to

address this issue, and it was called the Kyoto Protocol. This was the first and only major

act of international policy for combating climate change through reduction of carbon

dioxide emissions that had been proposed by the UN. The treaty had reduction

commitments from all the countries that agreed to sign it until 2012 to decrease

greenhouse gas emissions through multiple alternatives of policy options.21

The Kyoto Protocol itself targets emission reduction in 37 developed countries

and European communities. The protocol was designed to reduce emissions primarily

19UN Framework Convention on Climate Change, "Doha Climate Change Conference - November 2012." Last modified 2012. Accessed March 31, 2013. http://unfccc.int/meetings/doha_nov_2012/meeting/6815.php 20Herzog, Tim. World Resources Institute, "Greenhouse Gases and Where They Come From." Last modified 2006. Accessed March 30, 2013. http://www.wri.org/stories/2006/10/greenhouse-gases-and-where-they-come-from. 21"United Nations Framework on Climate Change Bodies." UN Framework Convention on Climate Change. UNFCCC, 20004 . Web. 1 Aug 2012. <http://unfccc.int/bodies/items/6241.php>.

through market policies in trading emissions and technology development.22 However,

there were some significant faults to the treaty that made it a failure overall. For example,

in Denmark policy makers identified that buying credits from other countries was cheaper

than investing in domestic green energies, which they had been prior to the agreement. In

general, there was no incentive to invest in sustainable energy within the treaty because

the cap for emissions was too high in most cases, or the country could buy units from

another party. Finally, underdeveloped nations were not required to reduce their

emissions at all. This means countries like India and China, which are two of the largest

producers of carbon dioxide in the world (see below) did not have to actively work to

mitigate the amount of emissions that come from their factories, industries, or energy

usage in general. With the US not agreeing to sign on because of economic concerns, the

treaty was essentially a symbolic gesture rather than a document that could produce any

tangible and effective results.23

22King, David, Kenneth Richard, and Sally Tyldesley. "International climate change negotiations: Key lessons and next steps." International climate change negotiations: Key lessons and next steps. University of Oxford, July 2011. Web. 2 Aug 2012.23LaValle, Liliana, and Amy Braun. University of Michigan, "Kyoto Protocol." Accessed April 1, 2013. http://sitemaker.umich.edu/section3group3/home.

Countries by Carbon Dioxide Emissions (thousands of tones) Global Greenhouse Warming, "Greenhouse Gas." Last modified 2013.

Although the Kyoto Protocol did not have the impact that was desired by the

UNFCCC, a significant amount of countries and individuals still believe it is imperative

that an agreement be developed that will work to significantly reduce carbon dioxide

emissions produced by human activities to mitigate global warming. It has been put in the

international forum because it a global problem that one country cannot solve. This is an

issue that needs to be addressed by the human population as a whole. I will now consider

what game pertains to creating a desired outcome to this situation, and identify what

criteria needs to be present in order to reach the optimal equilibrium in the game. The

optimal equilibrium in this case will be to have countries cooperate to design and support

a treaty that would significantly decrease carbon dioxide emission production to mitigate

climate change.

Coming to an Agreement:

To create an effective and successful international policy that helps mitigate

climate change through the reduction of carbon dioxide is a common goal of the

UNFCCC. According to Mancur Olson, “any common goal or the satisfaction of any

common interest means that a public or collective good has been provided for that

group.”24 A public good, according to Russell Hardin is defined by two characteristics,

the jointness of supply and the impossibility of exclusion.

24Mancur Olson, The Logic of Collective Action, (Cambridge, Massachusetts: Harvard University Press, 1971), 15

If a good has jointness of supply, one person’s consumption of the good does not

reduce the amount available to anyone else.25 For example, a monument will remain the

unaltered and provide the same service to all individuals that care to admire it regardless

of how many individuals look at it over time. One person or thousands of people could

view it and they would all receive the same enjoyment because the production costs are

fixed and the marginal production costs are zero. Adding additional units of people to

come view the monument will make little to no difference to the enjoyment that the

monument can provide.26

The second characteristic of public goods, the impossibility of exclusion; is

defined by the impossibility of preventing relevant people from consuming the good.27

To bring back the example of the monument; if the monument were to be in a place that

allowed free access to view it, and that prevented no one from being able to enjoy it, then

it would be impossible to exclude anyone from reaping the benefit of that good unless

there were extraneous circumstances.

The public or collective good that would be provided in the case of the UNFCCC

would be the reduction in the rate of climate change via a decrease in greenhouse gases

emitted by the parties that participate in the Conference. There is a jointness of supply

because no matter how many people are added to the situation to reap the benefits of the

stabilized climate adding more will not change those benefits that are derived from the

potential treaty. However, everyone needs to participate in the agreement or the benefits

cannot be obtained for everyone. There is also the impossibility of exclusion for the 25Russell Hardin, Collective Action A Book From Resources of the Future, (Baltimore, MD: Resources for the Future, 1993), 17.26Dennis Mueller, Public Choice III, (Cambridge University Press, 2003), 11 27Russell Hardin, Collective Action A Book From Resources of the Future, (Baltimore, MD: Resources for the Future, 1993), 17.

results of a possible agreement because no individual or country can have a faster rate of

climate change than anyone else. Global warming and climate change do not just affect

certain sectors of the world it affects everyone, the resilience of the environments that

people live in may be different, but the change for the globe overall will be the same and

affects everyone equally.

This issue has entered the international arena because currently countries and

people are witnessing the collective bad across the globe and the potential for it to get

worse. Because the effects of climate change are jointly supplied and nonexclusive; the

emissions that the United States (US) emits affects the sea level rise and land loss in

Kiribati. In other words, green house gas pollution is creating negative externalities, and

the UN is the forum that can help mediate those issues.

A negative externality occurs when an exchange happens between several parties,

and there are associated costs with that exchange that outside parties have to absorb. In

the example of the US and Kiribati, the US citizens make exchanges that have

greenhouse gas pollution associated with the goods that are exchanged. However, the

costs from that pollution, which includes the costs associated with global warming; are

not paid for or mitigated by those that conducted the exchange. Essentially, citizens from

the US do not worry about the costs that Kiribati has to take on as a result of the pollution

they produce.28

Climate change is an issue that does need to be addressed on a local, state and

national level in the various countries around the world because there are so many

individual actors that contribute to the externality. However, by incorporating climate 28Fundamental Finance, " Negative Externality." Last modified 2013. Accessed April 13, 2013. http://economics.fundamentalfinance.com/negative-externality.php.

change discussion into the international dialogue, it applies additional pressure to have

countries seriously commit to implementing national policy that encourages green energy

production, stimulates public transportation programs, works on developing sustainable

agricultural practices, and encourages creative technological innovations to use less

energy overall to mitigate climate change.

Although most countries and people recognize what needs to be done in order to

solve the problem and limit the amount of greenhouse gases that are emitted to prevent

the externalities associated with them, there are barriers that deter countries from

implementing significant policies and developing the technologies that are necessary to

make significant reductions in greenhouse gases. There are four primary barriers that

prevent states from acting on this issue, which includes leadership, resources,

communication and information, and values and beliefs. These barriers lead to nations to

defect from collaborating on international climate change policy, which means the

negative externalities from exchanges that produce green house gases will remain

present.29

First consider leadership, it is politically risky to attempt to make significant

changes to policy without the full support of peers or constituents for a person in a

leadership position in government. Given this condition, political leaders are going to

want to make gradual change that they know will not drastically alter the status quo, but

contributes to the process overall. Therefore, very few changes in climate change policy

29Susanne Moser, and Julia Ekstrom, "A framework to diagnose barriers to climate change adaptation," Proceedings of the National Academy of Sciences of the United States of America , 107, no. 51 (2010): 22026–22031, http://www.pnas.org/content/107/51/22026.full.pdf html (accessed April 1, 2013).

on the state level will be made over a period of years in most situations because of

leaders not being willing to take risks on the issue.30

Resources not only include financial resources, but also include technical

information, skill expertise in the country, time and planning/management. Without the

ability to garner these resources, being able to make significant infrastructural alterations

is incredibly difficult for many countries. However, obtaining these resources is critical to

altering the way they influence climate change. The economies of most countries

throughout the world rely on carbon sources for energy production, transportation, and

the creation of goods.31 Nations of the world need to find a way to maintain economic

vibrancy by producing enough to ensure they maintain their wealth, while also mitigating

emissions associated with that production. Changing their economies to reflect this need

can be incredibly difficult for many countries to help finance and institutionalize. A

country that does not have the resources to implement what they would need to commit

to in an agreement is a serious concern for many countries.32

Communication and information about scientific knowledge, technologies, and

collaborating systems are sectors, which countries have problems developing as well as

gaining access to. Developed countries are more likely to have systems and infrastructure

in place for information sharing and to help facilitate transitions into economies that have

less greenhouse gas emissions produced overall. However, many countries do not have

the institutional knowledge or capacity to implement systems such as these, and so very

30Susanne Moser, and Julia Ekstrom, "A framework to diagnose barriers to climate change adaptation," Proceedings of the National Academy of Sciences of the United States of America , 107, no. 51 (2010): 22026–2203131Rockwell, Richard. "From A Carbon Economy To A Mixed Economy: A Global Opportunity."Consequences: The Nature and Implications of Environmental Change. no. 1 (1998). http://www.gcrio.org/CONSEQUENCES/vol4no1/carbonecon.html (accessed April 14, 2013). 32Susanne Moser, and Julia Ekstrom.

little can be done to proactively address the anthropogenic climate change problem

because of lack of knowledge or lack of communication around the state.33

Finally, the values and beliefs that people hold in various cultures and societies

significantly influence the priority that climate change policy is given in the political

arena.34 For example, Jonathan Pershing, the US lead negotiator for the US delegation in

COP 18 in Doha, Qatar indicated that President Obama was prioritizing climate change

policy as one of the top three issues that he desires to address during his final term in

office. He continued to say that the reason that the President of the US was focusing on

this issue was because of the recent demonstrations in Washington D.C.. This is a

relatively new priority for the President, and it has become one because US citizens are

expressing concern on the issue. 35The values and beliefs that they society of the state has

influences policy outcomes greatly, and if the desire to engage in climate policy is not

there then it will be more difficult to encourage the state to act upon it.

Currently, all the parties that are participating in the COP are at a

suboptimal position in relation to their goal, which is to mitigate the negative externalities

that are coming from climate change. The optimal position would be a situation in which

the countries come to an agreement where they overcame the barriers that are currently

hindering them to implement the climate policy that should be adopted to address the

collective action problem of climate change. The question then becomes, how can this

collective action problem be solved internationally, and an agreement be made to

mitigate climate change?

33Susanne Moser, and Julia Ekstrom.34Susanne Moser, and Julia Ekstrom.35Pershing Johnathan, (Lead US Negotiator for US Negotiating Team COP 18), interview by Natalie Lucas, Doha, Qatar. Nov 27, 2012.

The toy game, the Stag Hunt, can model the international negotiations relating to

climate change and greenhouse gas reduction. This game helps explain and model why a

strong agreement for carbon dioxide emission reductions has not been reached yet even

though negotiations have been going on for over 20 years now. Jean-Jacques Rousseau

first conceptualized the Stag Hunt Game, and he recognized that in order to achieve pure

coordination; preferences need to be altered by the actors in the game to accommodate

that potential.36

The story for the traditional game goes as follows, Alice and Bob have been

presented with the opportunity to work together to hunt a stag. The stag would give meat

to Alice and Bob that could last them for weeks, and overall they would be significantly

better off than if they were to hunt hare on their own. However, the stag can only be

taken down if they cooperate and work together to hunt it, otherwise it will escape. Both

Alice and Bob could starve if the stag is not caught because they would have wasted all

their energy pursuing the stag. Alice and Bob have never worked together before, and

they both know that if the other defects and decides to not hunt the stag, and they go to

hunt the hare instead, then Alice or Bob has a good chance of starving because the other

person defected. The payoffs for the game are:

37 Cooperate Defect Cooperate 5,5 0,4

Defect 4,0 2,2

36Ken Binmore, Game Theory: A Very Short Introduction, (New York: Oxford University Press, 2007), 68.37Ken Binmore, Game Theory: A Very Short Introduction, (New York: Oxford University Press, 2007), 68.

Table1

The outcomes in Table 1 illustrate the payoffs that are a result of each choice that

is made by each participant in the game. When both individuals cooperate, the highest

payoffs are present at 5,5 because both Alice and Bob worked together to hunt the stag,

and they get fed the most. When one person hunts stag while the other defects, one

individual obtains food (4) while the other person starves (0) as an outcome. Finally,

when both individuals defect and go hunt hare, they do not get as much food but they

survive with payoffs of 2,2.

There are two Nash Equilibrium that arise from this game. Nash Equilibrium are a

pair of strategies where “all the players are simultaneously making the best reply to the

strategy choices of the others,” according to Ken Binmore.38 The two Nash Equilibrium

are for both participants in the game to defect or cooperate. If they both believed that

both individuals in this game would cooperate, than it would only make sense based on

the other person’s strategy to cooperate as well in order to reap the benefits of the stag.

However, if they both had some sort of doubt that the other individual in this situation

would defect, then it would make sense for both of them to defect given the other

person’s potential choice.

It would not make sense for either of the individuals in the game to enter a

situation in which they could potentially starve based on the other person’s action. This is

given that these two individuals are risk adverse, and would not enter the situation

knowing that they could be possibly losing their meal by trusting the other person. If one

person in this situation believes the other will defect while they cooperate then they are

entering the game not making the choice that best responds to the other person’s action.

38Ken Binmore, Game Theory: A Very Short Introduction, (New York: Oxford University Press, 2007), 14.

No rational person would do this unless there were other factors that were influencing

this decision-making. Therefore, only the bolded responses in Table 1 fulfill the Nash

Equilibrium.

Although there are two Nash Equilibriums, the basin of attraction for this game

leans toward the equilibrium in which both individuals defect. It is difficult to know with

a certain certainty that the other individual in the game will not defect. Cooperating takes

quite a bit of trust, and the risks of losing are incredibly high. The payoffs are structured

in a way that makes the shift from defecting to cooperating exceptionally difficult

because of the risk of starvation in this case. If the other person does not cooperate they

get to eat while the person that trusted them now has to starve. There is quite a bit to gain

with cooperation, but a lot more to lose if the cooperation falls through for the person that

decided to cooperate.39

The way this game is applied to the international negotiations situation is that the

countries are coming together in a conference to try to come up with solutions to this

issue of climate change, and there are several outcomes that are possible that mimic the

stag hunt game. The conference can come up with a policy that every country contributes

to, that has a significant impact on the reduction of carbon dioxide, which would be the

preferred Nash Equilibrium for cooperate,cooperate (5,5). Another result, though unlikely,

could be that several countries take on the costs to mitigate carbon dioxide emissions by

overcoming the barriers to climate change policy, while others do not. This is the defect,

cooperate option in the stag hunt game (4,0/0,4), and not one of the Nash Equilibrium.

This is a very unlikely outcome because it creates a situation where some countries would

39Ken Binmore, Game Theory: A Very Short Introduction, (New York: Oxford University Press, 2007), 14.

take on the burden of creating change at a high cost to themselves, while others would

not have to contribute to the solution. Additionally, if the countries that defect are high

carbon dioxide emitters, then the costs are even more extravagant because the impacts of

the change of the cooperative country may not make a difference. The final option is that

the countries continue to engage in these conferences without any significant policy being

decided upon, which is the defect, defect option (2,2), and the other Nash Equilibrium.

Currently countries are defecting, and are not willing to make the commitments

that are necessary in order to actually mitigate climate change.40 In order to move from

the equilibrium where countries are defecting to the equilibrium where countries are

cooperating, several actions need to happen to establish the norm of cooperation between

the parties in the conference. These actions need to include countries assisting each other

in working to bring down the barriers that inhibit countries from implementing climate

policy as well as countries indicating that they are willing to cooperate fully by the way

they behave towards one another.

Application in UN Negotiations:

The Stag Hunt at Work:

In the 1980s scientists realized that a hole was forming in the ozone layer, which

is in the stratosphere, an upper part of the Earth’s atmosphere. This hole was a concern

because the ozone layer protects life on Earth from UV light radiation, which can be

damaging if an organism is exposed to it for too long. Without the ozone layer, there

would not be a sufficient way to limit exposure from this radiation, which could have

serious health effects for life on Earth. Chemicals binding with ozone in the atmosphere

40LaValle, Liliana, and Amy Braun. University of Michigan, "Kyoto Protocol." Accessed April 1, 2013. http://sitemaker.umich.edu/section3group3/home.

were creating the hole. The chemicals would bind with the ozone, and the ozone would

fall out of the atmosphere in specific areas because the density of the gas was changed.

Essentially, the gas could not stay floating where it was anymore because there were

other molecules bringing it closer to Earth’s surface, since they were heavier. There are

several substances that come from fertilizers and aerosols that can cause the depletion of

ozone in the atmosphere. The primary chemical that scientists could identify that needed

to be banned first was chlorofluorocarbons or CFCs.41

The main source of CFCs was mainly from aerosols, and they were being

produced all over the world for various products. Even if one country had taken on the

cost to prohibit the manufacturing of CFCs in order to ensure that the ozone layer was

protected, then demand would simply shift to other places in the world, and the same

amount of CFCs would be produced. The transition from CFCs to other chemicals that do

not degrade the ozone layer was unlikely to occur, given that to remove CFCs from

production would cost quite a bit for companies to develop the technologies and alter the

infrastructure needed to continue producing product similar to those that have CFCs in

them.42 Essentially, in order to combat the problem, CFCs needed to be removed

worldwide or the negative externality would still be present, and CFCs would continue to

deplete the ozone layer. After several years of negotiations between countries, the end

result was the Montreal Protocol, which was agreed upon by the parties on September 16,

41US Environmental Protection Agency, "The Montreal Protocol on Substances that Deplete the Ozone Layer." Last modified Sept. 18, 2012. Accessed April 14, 2013. http://www.epa.gov/ozone/intpol/. 42Benedick, Richard. The Encyclopedia of Earth, "Science, diplomacy, and the Montreal Protocol." Last modified June 12, 2007. Accessed April 15, 2013. http://www.eoearth.org/article/Science,_diplomacy,_and_the_Montreal_Protocol.

1987. The Protocol removed the production of CFCs around the globe, and subsequent

amendments addressed other chemicals that also deplete the ozone layer. 43

The way the Montreal Protocol was developed reflects the concept of the stag

hunt game, and illustrates how atmospheric pollution problems, such as ozone depletion,

can be addressed through international policy to move to the optimal Nash Equilibrium

through a cooperative move in the game. The stag in this situation is the removal of the

ozone depleting substances from production around the world. Every party would be

better off if they all agreed to not produce those substances anymore because then the

ozone layer would not be destroyed. If the ozone layer were to be destroyed then there

could be serious health and environmental consequences. Although all parties agree that

banning the chemicals that cause the depletion of the ozone would be the optimal solution,

as stated before, even if some countries decided not to produce the products that contain

these ozone-depleting substances, other countries would compensate by producing more

because the market would demand it from them. Therefore, it does not make sense as an

individual party to allow others to continue to manufacture and make money without

investing in other technologies that could replace CFCs while the externality still persists.

It would make more sense for everyone in the situation to just continue to produce under

the status quo. What then ends up happening is that all countries continue to produce

what were producing before, and the ozone layer then continues to be depleted.

In this situation, the countries could continue to defect and produce the ozone

depleting substances, or they could work together to ban the substances that were causing

43United Nations Environment Programme Ozone Secretariat, "The Montreal Protocol on Substances that Deplete the Ozone Layer." Last modified 2012. Accessed April 14, 2013. http://ozone.unep.org/new_site/en/montreal_protocol.php.

the problem, which are the two Nash Equilibrium in this stag hunt game. The basin of

attraction was to defect, and to continue to produce the CFCs because the costs to the

individual countries appeared to be too high to ban CFC production. At the very

beginning of the negotiations Richard Benedick, the international environmental portfolio

supervisor in 1985 for the US State Department, illustrates this by saying:

Very few gamblers would have wagered at that time that such negotiations could succeed. CFCs were virtually synonymous with modern standards of living, finding new uses in thousands of products and processes. Billions of dollars of international investment and hundreds of thousands of jobs worldwide

were involved. Technological alternatives were nonexistent or considered too costly or unfeasible. Powerful governments and global economic interests were aligned in adamant opposition to controls, as were ideological elements within the administration of President Reagan. Still other governments and

publics were unaware or indifferent to an arcane threat. Perhaps most significant of all, the arguments for control rested on unproven scientific theories: throughout the protocol negotiations there was firm evidence

neither of the predicted ozone layer depletion nor of any harmful effects.44

The basins of attraction strongly leaned to parties defecting from acting on this issue

internationally because the costs were exceptionally high, making the Nash Equilibrium

of cooperate, cooperate very unlikely as would be true in the stag hunt game.

Although the outcome of most parties defecting was initially the case for

developing an international agreement to prevent the production of ozone depleting

substances, Peter Morrisette, a fellow at the National Center for Atmospheric Research

(NCAR) outlines three factors that encouraged parties to cooperate and sign the

agreement, which ended up outweighing the costs the countries originally faced. These

three critical factors were evolving science, increasing public concern, and the

availability of acceptable substitutes.45

44Benedick, Richard. The Encyclopedia of Earth, "Science, diplomacy, and the Montreal Protocol." Last modified June 12, 2007. Accessed April 15, 2013. http://www.eoearth.org/article/Science,_diplomacy,_and_the_Montreal_Protocol. 45Morrisette, Peter. "The Evolution of Policy Responses to Stratospheric Ozone Depletion." Natural Resources Journal. (1998): 793-820. http://www.ciesin.org/docs/003-006/003-006.html (accessed April 15, 2013).

Immediately after the hole in the ozone layer had been discovered over the Arctic,

scientists from around the world were employed to study and verify this new atmospheric

concern. Initially, many people around the world did not think that ozone depletion in the

atmosphere would be possible at this scale, and so it needed to be verified before

countries around the globe would act. As the results from the various studies began to

confirm the hypothesis that certain substances were in fact depleting the ozone layer in

the atmosphere, countries were more likely to consider signing the agreement because of

the consequences that could occur if this layer were to continue to deteriorate.46

As the science began to develop and evolve, so did the knowledge and concern

that the public in many countries had on the issue. It was not exactly clear what the

repercussions were going to be for ecosystems or humans if the ozone layer was to

seriously be deteriorated. However, according to Morrisette, the public responds to

environmental risks such as the depletion of the ozone layer with a characteristic called

“dread.” This “dread factor” is associated with technologies and hazards that “are seen to

be globally catastrophic, threatening to future generations, increasing, hard to prevent,

not easily reduced, involuntary, and personally threatening.”47 This “dread” was starting

to become prevalent throughout many countries as individuals around the world began to

write about the issue in public forums, and people began to discuss the possible

repercussions, which were unknown at the time, in many political arenas. The public

46Morrisette, Peter. "The Evolution of Policy Responses to Stratospheric Ozone Depletion." Natural Resources Journal. (1998): 793-820. http://www.ciesin.org/docs/003-006/003-006.html (accessed April 15, 2013).47Morrisette, Peter. "The Evolution of Policy Responses to Stratospheric Ozone Depletion." Natural Resources Journal. (1998): 793-820. http://www.ciesin.org/docs/003-006/003-006.html (accessed April 15, 2013).

concern helped encourage the parties involved in developing the agreement to come to a

resolution and act on it.

Finally, the availability of substitutes for CFCs and other chemicals was the last

factor that ensured that cooperation between the parties, and encouraged them to come to

an agreement on how to limit the amount of ozone depleting substances entering the

atmosphere. Japan and European industries vocalized their concerns adamantly against

the possibility of changing their production to not include CFCs. However, there was one

company, DuPont that controlled 25% of the market producing CFCs. This company was

working on developing alternatives, and saw the working agreement between the nations

was a possibility to gain more from the market of alternatives than CFCs since they had a

head start. Because of this, they began to lobby with other groups around the world for an

agreement to be put in place to encourage industry to look for alternatives. With the

correct incentives in industry DuPont and other companies knew it would not take them

long to find a replacement.48

These three factors created a situation in which the countries could cooperate and

did not need to defect. Overcoming the barriers of the lack of scientific proof and

industry concerns gave the opportunity to the parties to make very aggressive policy

towards eliminating CFC production around the world in only a few years. The Montreal

Protocol was one of the most effective international environmental treaties that have ever

been constructed. In ten years it removed almost 100 percent of ozone damaging

48Morrisette, Peter. "The Evolution of Policy Responses to Stratospheric Ozone Depletion." Natural Resources Journal. (1998): 793-820. http://www.ciesin.org/docs/003-006/003-006.html (accessed April 15, 2013).

substances from production across the globe.49 This is because the parties that developed

the Protocol came together to hunt the stag, and found reasons and ways to not defect

from making the agreement.

So What About Green House Gases Currently?

Currently, the parties come together for an annual conference specifically

targeted at reducing the amount of green house gases that are emitted throughout the

world. The most current conference, the COP 18 was held in Doha, Qatar in 2012. I was

given the opportunity to go to the conference under a nongovernmental organization, the

Sierra Club. Because I was not a delegate I did not get to witness the negotiations that

were held behind closed doors, however, I was able to witness the plenary sessions where

the delegates from all the represented nations were discussing text that was moving

through the conference to be agreed upon. Attending this conference gave me a clear idea

of where the parties stand in coming up with a significant international agreement that

addresses climate change.

The conference is two weeks long, and a variety of issues are discussed to address

climate change, and to attempt to remove some of the barriers associated with mitigating

green house gas emissions. Some of the barriers addressed include finance, information

sharing, long-term cooperative action, and implementation of technologies. These

barriers are discussed in separate sessions, and are given special attention outside of

developing an overall agreement so that the parties involved in developing the treaty that

will mitigate greenhouse gases will have an easier time signing it. Having these sessions

49Molina, Mario. "A Climate Success Story to Build On." New York Times, , sec. Op Ed, September 25, 2012. http://www.nytimes.com/2012/09/26/opinion/montreal-protocol-a-climate-success-story-to-build-on.html?_r=0 (accessed April 15, 2013).

helps mitigate the costs that individual countries would have to take on if they were to

agree to seriously address climate change, and make significant changes to their

infrastructure. In the stag hunt this makes it easier for the parties to feel as if they can

cooperate in developing the treaty.

For example, many developing countries around the world do not have the

financial ability to be able to ensure their energy is produced by renewable sources such

as solar panels. To alter their infrastructure to incorporate renewable energies would not

be possible, and so signing an agreement that forces them to make those changes when

they are trying to develop and compete with the international market would not be

possible. The costs would be too high for the country, and therefore they would have to

defect from agreeing to the treaty that is developed, and cannot reach the cooperative

agreement. To address problems such as these, the UNFCCC COP created a Green

Climate Fund that is supported by industrialized nations as well as private donors. By the

Green Climate Fund assisting developing nations in taking on the cost of implementing

technologies that do not emit as much carbon, the Fund is creating a situation where

developing nations can cooperate with an agreement to mitigate or decrease emissions

coming from their country.50

The same principle is applied to other barriers that could discourage nations from

agreeing to a treaty that could come about in the negotiations. Ensuring that nations have

access to resources and technology is critical to the conference coming to an agreement.

These side discussions occur throughout the two weeks, and it is a way that the parties in

the negotiations can be encouraged to cooperate as opposed to defect from the agreement. 50Green Climate Fund, "Mandate and Governance." Last modified 2013. Accessed April 16, 2013. http://gcfund.net/about-the-fund/mandate-and-governance.html.

These negotiations also have problems associated with them because of patents and

concerns with market transactions with technology. For one country to give another

country access to technology and funding could alter the benefits that they get financially.

Because of this, the removal of barriers for a climate change agreement is also a difficult

process.

The agreement that would mitigate climate change will not be agreed upon until

2020. The reason for this is that the Kyoto Protocol does not expire until 2020. At that

point, delegates are indicating that they are going to be willing to agree to another treaty

as long as the costs are not too high, and they believe their countries will support that

action. The hope is that most of the barriers that countries are concerned about will

essentially be removed enough that they feel as if they can commit to the agreement and

cooperate. This cooperation would be equivalent to hunting the stag in the stag hunt

game, and hopefully would address the problem in a very significant way.

Currently there is an agreement in place that the parties in the conference will not

allow the average world temperature to go above 2°C from the 1990 baseline. This

ensures that there is some sort of limit on the amount of emissions countries can produce,

but all the parties involved know something needs to be done before then. With only

seven years left to relieve the barriers enough to encourage the parties to cooperate as

opposed to defect to the next international climate agreement, there are some concerns as

to whether this can actually be done.

Unlike in the Montreal Protocol, there are many more actors that are producing

greenhouse gases, and essentially every individual on the planet contributes to that

production. Industry does produce the largest amount of greenhouse gas emissions, but

one company cannot be pointed out for producing 25% of them, and be told to stop. This

makes it much more difficult to encourage industry to change their behavior as a whole.

Additionally, the substitutes that are currently available to mitigate green house gas

production in cars, energy production for housing, and in waste collection, have high

costs associated with them as indicated in previous sections. In the case of the Montreal

Protocol, the substitutes for CFCs and other chemicals were not that expensive once they

were developed.51

The barriers for cooperation in this situation seem much higher for coming to an

agreement between the parties to mitigate climate change than was present in the

development of the Montreal Protocol. It is clear that there are distinct efforts being made

to try to eliminate some of those barriers. Removing these barriers is also important

because then every country can participate in the agreement as opposed to some being

exempt because they are still developing.

For example, China and India did not have to participate in the Kyoto Protocol in

the same way that the US did because the US was an industrialized country, whereas,

China and India were developing. Although it is true that the US would have a distinct

advantage in changing its infrastructure to accommodate low green house gas producing

technologies, because China and India did not have to make significant alterations to their

economy this encouraged the US to defect from the agreement. All parties must commit,

and be willing to take on the costs to make the changes that are needed in order to have

an effective agreement that mitigates green house gas emissions.

51Morrisette, Peter. "The Evolution of Policy Responses to Stratospheric Ozone Depletion." Natural Resources Journal. (1998): 793-820. http://www.ciesin.org/docs/003-006/003-006.html (accessed April 15, 2013).

Conclusion:

Greenhouse gas emissions are creating problems around the world, and are

altering ecosystems as well as harming human habitats. The more greenhouse gases that

are produced, the more there will be a warming effect that can have very drastic

consequences. The environment cannot change at the rate that it needs to in order to adapt

to human induced global warming. The rate at which the planet is warming is the

problem because it is not possible for ecosystems to evolve at that pace. Because of this

situation, countries must act to form an agreement that mitigates climate change through

the significant reduction of greenhouse gases. This agreement will need to be developed

and signed by all nations in order to have the effect that is necessary to slow the rate of

climate change.

The toy game that reflects this situation is the stag hunt game. In this game two

individuals have the opportunity to hunt stag or hare. The stage would give the best

results if it is hunted. However, in order to kill the stag all the individuals in the party

must work together to capture it. The stag in the case of mitigating climate change would

be limiting greenhouse gases that enter the atmosphere. The only way this can be done is

if every party cooperates and decides not to continue to produce greenhouse gases the

way they currently are.

There are significant costs to signing an agreement such as this for the nations

participating in the development of this treaty. Because of those costs, the players in the

game and in the conference have a strong tendency to defect and not enter the agreement.

These costs include financial costs and technical costs, and are exceptionally hard to

overcome. Although the costs of making large infrastructural changes to prevent a

negative externality are high, it can be managed and alternatives can be presented and

paid for through a collective effort. Through the collaborative effort the Montreal

Protocol was developed between the parties.

In the case of the Montreal Protocol, the stag hunt persists as the toy game the

negotiations can be modeled by. There were many parties that all desired to address the

increasingly large hole in the ozone layer that was being created by CFCs. This was the

stag for these parties. However, the countries defected initially from the agreement

because the costs were to high to make the changes that would be needed to abide by

what was desired from the agreement. Defection occurred until public interest, science,

and substitutes for CFCs came about. Once parties realized that cooperation was going to

be a tangible possibility the Montreal Protocol became one of the most effective

international environmental treaties.

Coming to an agreement between the parties for green house gas reduction plan

reflects the stag hunt game as well, and it faces some of the same challenges that the

Montreal Protocol did as well. In order to ensure that an agreement does get developed

and implemented, the barriers to cooperation need to be brought down as much as

possible. Defection is easier in this situation, however, cooperation will have the best

outcome overall for all those that are involved in the game. Therefore, continuing to share

technology, resources, and people will be critical to ensuring the optimal Nash

Equilibrium is obtained, and that climate change is mitigate through that agreement.

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