Climate change is an odd sort of prisoner’s dilemma

by Milan on May 3, 2010

in Climate change, Economics, Ethics

The ordinary prisoner’s dilemma

People often describe climate change as an example of the prisoner’s dilemma – a thought experiment that supposedly teaches something about when people will cooperate and when they will not.

This thought experiment is based around two criminals who have been caught. Each has the choice to either squeal on his partner or stay silent. If both stay silent, they each get a six month prison sentence. If one squeals, that one goes free in exchange for their testimony and the other partner gets life in prison. If they both squeal, they both end up with ten years in prison.

The thought experiment can be tweaked in many ways, but the basic point usually being made is that it is in each prisoner’s best interest to squeal, regardless of what the other person does. If the other person stays silent, you are better off squealing, since it is better to walk free than to take six months in jail. If other person squeals, you might as well squeal too, since it is better to get ten years than to get life. Since you don’t know in advance what the other prisoner will do, the safest choice is to squeal.

The climate change version

The situation with climate change is rather different.

First, there are more players. To simplify, let’s boil it down to the ones that really matter. There are the big emitters: the United States, the European Union, China, Japan, etc. Then there are the places where massive deforestation is happening, like Brazil and Indonesia. For the purposes of this thought experiment, that are all imprisoned simultaneously. They can either cooperate to stop climate change or ‘defect’ by pursuing near-term economic gain at the cost of the health of the planet.

The cost of dealing with climate change is estimated at around 2% of global GDP, provided we start early and design mitigation policies in intelligent ways. That, then, is the cost of cooperation – the lifetime garnishing of your wages. The cost of everybody defecting is far worse – likely catastrophic or runaway climate change. Of course, this doesn’t happen immediately. You have a window in which everything is basically normal (the Arctic is melting, but who cares?) followed by a period that is extremely unpleasant. To tie it back to the legal analogy, it is a bit like all of the players getting a year in which to go off and do whatever they like, followed by harsh imprisonment for the rest of their lives.

The logic of the prisoner’s dilemma remains. If everybody else defects and you take the high road, paying 2% of your GDP to finance the transition to carbon neutrality, you still end up imprisoned with everyone else after the freebie year is over. Indeed, this problem is more acute than it looks on first inspection. Because the climate change we are producing will persist for hundreds or thousands of years, it is quite possible that those making the decisions today will die before the freebie year ends, leaving the period of harsh imprisonment to future generations.

Lessons

Avoiding that requires farsightedness and a willingness to take our ethical obligations towards future generations seriously. The evidence so far – ever-increasing global emissions – suggests that we haven’t yet absorbed that lesson. The future of humanity will be affected to a dramatic extent by whether or not it does get absorbed while we still have time.

We do have one leg up on the hypothetical prisoner’s in the original example. States can observe what other states are doing, and can reward those who are cooperating in the joint venture of dealing with climate change, while punishing those who act in a selfish and shirt-sighted way.

There is also another perspective on that 2% wage garnishing. As this site argues, dealing with climate change is mostly a matter of moving beyond fossil fuels. While doing so involves abandoning certain opportunities for energy and wealth, it also involves living in a cleaner and safer world. In short, there may be major advantages to be had from the push to carbon neutrality; the wage garnishing might not be so bad.

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{ 1 comment… read it below or add one }

Byron Smith May 8, 2010 at 2:44 pm

those who act in a selfish and shirt-sighted way
Get your eyes off those shirts! ;-)

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