The Paris Agreement: A Prisoner’s Dilemma Model
For the past 30 years, global temperature has been rising at a rate of 0.2°C .If this trend continues upwards, it is widely agreed that there will be devastating consequences for the Earth’s climate. Therefore, countries have tried to combat this scenario by creating climate agreements to foster cooperation between governments with the goal of lowering mean global temperature, such as the Paris agreement. This agreement was created in 2015 with the aim of keeping the rise in mean global temperature to well below 2°C . However, in 2017 Donald Trump intended to withdraw America from the climate agreement which was in part due to Donald Trump’s close ties with the fossil fuel industry . Even though America has since re-joined the Paris agreement, Donald Trump’s withdrawal leaves us with one question, does the allure of large private benefits that countries receive from emitting greenhouse gas emissions outweigh the benefit of cooperation, making any such climate agreement unsustainable. We will use a prisoner’s dilemma game to answer these questions.
Prisoner’s Dilemma The premise of the prisoner’s dilemma is simple, two criminals (A and B) are captured and questioned by authorities separately with no means of communication with each other. They have two actions, either cooperate with each other and remain silent or defect from each other and confess to the authorities. The actions each prisoner takes will result in a different payoff represented by the number of years in jail they are sentenced to.
In our case, if the prisoners cooperate, they both receive 1 year in jail and if they both defect, they both receive 3 years in jail. If one cooperates and the other defects, whoever cooperates receives 10 years in jail and whoever defects avoids jail time completely. This is shown in our payoff matrix below:
As both prisoners act in their own self-interest, their best outcome is to always defect no matter what the other prisoner’s action is. For example, if prisoner B chooses to cooperate, prisoner A will choose to defect as he would receive 0 years jail time compared to if he cooperated and got 1 year jail time. However, if prisoner B chose to defect prisoner A would also choose to defect as 2 years jail time is better than 10 years jail time. When both players defect this is known as a Nash equilibrium, or a scenario where a player would not benefit by changing their strategy if the other player’s strategy remained the same.
Prisoner’s Dilemma as Climate Change
In the case of a climate agreement, cooperating would be countries committing to keeping global temperature below 2°C and defecting would be ignoring this goal and increasing the use of fossil fuels. Therefore, from our game, we can assume Donald Trump simply chose the decision that resulted in the greatest payoff for America, and it would be illogical for other countries not to follow suit, creating a Nash equilibrium. Not doing so would result in a free-riding situation where other countries have to increase their restrictions on fossil fuels to bear the cost of America’s defection. However, the simple prisoner’s dilemma does not explain the whole picture of the Paris agreement, and shortfalls within the model could explain why no other countries followed America’s lead and left the agreement.
For example, the prisoner’s dilemma assumes perfect information regarding payoffs for each player, whereas the payoffs for preventing climate change are uncertain. e.g., Donald Trump, who believes the effects of climate change to be limited, sees a greater payoff in pursuing fossil fuels than a country which takes climate change more seriously. The prisoner’s dilemma is also a one round where the player can only make their decision once, whereas a climate agreement takes place over multiple rounds where a player can choose to cooperate or defect at any given time. This gives rise to concepts like punishments such as taxes for countries that make unfavourable decisions, a feature not present in the one-round prisoner’s dilemma.
Viewing the problem of climate change through the lens of the prisoner’s dilemma allows us to see how large private benefits are received from defecting and therefore can outweigh the benefits of cooperating, making climate agreements between self-interested countries unsustainable. However, when we consider the limitations of the prisoner’s dilemma, we understand just how complicated creating and sustaining a global climate agreement can be.
Edited and Reviewed by Tanish Bagga
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