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Climate and Game Theory

Edward A. Reid Jr.
Posted On:
Jul 28, 2020 at 3:00 AM
Climate Change

Zero-sum, positive-sum, and negative-sum are all game theory terms that refer to the outcomes of a dispute or negotiation. They refer to the actual amount of wealth (money, land, vacation time) -- measurable rewards -- that each party receives. (link)

The UN Framework Convention on Climate Change (UNFCCC) process which led to the Paris Accords has been a 25-year international negotiation regarding atmospheric emissions and wealth. It has been a very difficult negotiation because, ultimately, the primary focus of the negotiation must be a negative sum game. To achieve the desired outcome of the process, all parties to the negotiation must reduce their emissions of the gases identified as the primary drivers of anthropogenic global warming and climate change toward a goal of net-zero emissions. To achieve this endgame, there can be no “winners”.

The negotiations have seen the UN member nations divide into three basic groupings: developed nations, developing nations and not-yet-developing nations. The developed nations are seen as having been responsible for much of the increase in atmospheric concentrations of CO2 and other gases identified as “greenhouse gases”. The developing nations are rapidly increasing their emissions of these gases as their economies develop. Interestingly, China, the globe’s second largest economy, is classed as a developing nation, though its annual CO2 emissions are the globe’s largest by a factor of two.

The developing and not-yet-developing nations believe that they should be able to continue to increase their emissions as they pursue economic development; and, that the developed nations should decrease their emissions to offset the increases by the developing and not-yet-developing nations. This position is based on their concepts of economic and climate “justice”. However, this position is untenable when the largest and fastest growing emitter is a developing country; and, as a result, global annual emissions continue to increase and will for the foreseeable future. This approach has effectively converted what was supposed to be a negative-sum game into a positive-sum game.

A secondary focus of the UNFCCC process is the Green Climate Fund, intended to transfer wealth and income from the developed nations to the developing and not-yet-developing nations to fund climate change mitigation and adaptation efforts and provide compensatory finding for “loss and damage” resulting from climate change. The Green Climate Fund is designed as a zero-sum game in which the losses experienced by the developed nations transferring wealth and income to the Fund are equal to the gains experienced by the recipients of distributions from the Fund plus the administrative overhead of the Fund. The “winners” are more committed to this game than the “losers”.

It is becoming increasingly clear that the UNFCCC process will not be able to achieve its stated objectives without some overarching global government structure which has the power to enforce the emissions reductions and transfer payments determined necessary to achieve the objectives. However, there appears to be little interest on the part of the developed countries and the largest of the developing countries to surrender their sovereignty and subject themselves to the dictates of a global government.