Had the players noticed the red flag thrown onto the climate field shortly before the Lima conference, they might not have continued to play a meaningless game. The flag was the joint US-China climate pledge, which will cover 40% of global emissions under the upcoming Paris agreement.
The US pledge is a mere aspiration, and China’s pledge, as explained below, shows no climate ambition whatsoever. These outcomes are the direct result of an inverted approach to the agreement — that approach is known as pledge and review.
Understanding negotiators as prisoners
As has been often noted, the climate problem is a global public goods game, which simply means that all countries would like to free-ride on the efforts of others. This is just the famed prisoner’s dilemma game, but with more prisoners. And the only logical strategy for the prisoners is for each to defect, no matter what the others pledge to do.
The only hope then, is to change the game. And this is the wise intention of “pledge and review.” The idea is to repeat the game periodically with a careful review at each cycle. The hope is that the review will “build trust” and result in more ambition.
What has been missed is the fact that this particular approach to changing the game has been the subject of innumerable experiments over the last forty years. The outcome in these experiments, is that ambition starts out moderately high and declines as the reviewing process reveals the self-interested behavior of other players.
In reality, reviews build dis-trust
China’s pledge provides a dramatic example. A full review of it can be found at ClimateParis.org, but a quick review will suffice.
The actions that China pledged will help mitigate climate change. But they were not motivated by that fact or by the coming Paris agreement. The problem is not China, it is “pledge and review.” China pledged to do exactly what they had to do anyway for purely domestic reasons, and that is what most others will do as well. Unfortunately, while domestic cleanup is helpful for climate mitigation, it falls far short of what is needed. Were it enough, there would be no need for an international mitigation agreement.
In brief, China had already planned to cap coal use at 4.2 billion tonnes in 2020, because that is “at the limits of endurance for the domestic environment.” Having done that, they knew CO2 would peak by about 2025 (so they pledged 2030 to be safe). And with limited gas and oil supplies, the only possible way for them to keep up with energy demand is to build their pledged amount of non-fossil capacity.
China understands this and never says their pledge is in response to climate change. Instead, they say it is “an upbeat signal to motivate other countries.”
There is hope
Fortunately, as a number of top policy experts (Stiglitz, Nordhaus, etc.) are now discovering, there is another way to change the game. This new approach actually does reduce the free-rider problem and has now even been tested experimentally. (See carbon-price.com.) It’s time negotiators started paying attention to the science of cooperation, rather than listening to naive ideologies.