A winning formula for climate change conferences?

The likelihood of damage caused by climate change in the medium term could bring poor and rich countries to effectively reduce carbon dioxide emissions

November 22, 2011

A global agreement on effective climate change mitigation could be closer to realisation – if the findings of Max Planck scientists are incorporated in negotiations. According to these, success at the climate change conferences would be more likely if the intermediate costs of climate change, that is, in the next twenty years or so, were to be considered, as well as the means to prevent them. It could persuade rich countries to reduce their greenhouse gas emissions to the extent that they would compensate for insufficient efforts by developing and emerging countries. This was established by scientists from the Max Planck Institutes for Evolutionary Biology and Meteorology in a study of game theory, which was realised in response to the fact that rich and poor countries have been unable to agree especially on their levels of contribution at recent climate change conferences, like the one in Copenhagen in 2009.

Opting out pays off – but only in the long term. The bill for adapting our use of energy, mobility and consumption to mitigate the effects of climate change is daunting. However, the only way to avoid foreseeable and potentially dangerous damage from irreversible climate change is to reduce global greenhouse gas emissions by around 50 per cent by the middle of this century. Still, impending future losses are apparently not enough to make states commit to reducing the emissions sufficiently.

“The greatest conflict right now arises from the discussion about who should pay what among the rich industrial nations and the poorer developing and emerging states”, Jochem Marotzke, Director of the Max Planck Institute for Meteorology in Hamburg, says. Together with colleagues from the Max Planck Institute for Evolutionary Biology in Plön, he now suggests a solution to the deadlock.

The industrial nations could be persuaded to spend more on climate mitigation much sooner, if they were shown evidence that they could prevent economic losses which would be brought on by climate change in the next ten to twenty years. The likelihood of intermediate damage could even incite them to compensate for the insufficient contributions of poorer countries. These are the conclusions drawn by Max Planck scientists from the results of a modified public goods game.

Climate change mitigation only pays off if everyone gets involved

“We use this game to simulate the social dilemma of countries in the climate change negotiations”, Manfred Milinski, Director at the Max Planck Institute for Evolutionary Biology in Plön and co-author of the study, explains. Countries tend to weigh up the pros and cons of investing in climate change mitigation: cutting back only pays off if the global community as a whole can achieve the reduction target of around 50 per cent by 2050. “If it succeeds, all the countries win; including those who have not contributed at all”, Manfred Milinski says. If the international community falls significantly short of the reduction target, the countries which invested in climate change mitigation early on will pay twice: for mitigation and for the dangerous consequences of failure.

It is a fact that global carbon dioxide emissions are rising steeply. Apparently, most countries are counting on other states to contribute to climate change mitigation and thereby compensate for their own shortcomings. Alternatively, they may be hoping that they will be able to cope financially with even a global warming of more than two degrees Celsius, although scientists are predicting very drastic effects of this scenario, with more than 95 per cent certainty. At least current decisions are based on a timescale which apparently no longer considers damage occurring in the second half of this century, however serious it may be.

“We want to find a way of meeting the reduction target that prevents dangerous and irreversible climate change”, Jochem Marotzke says. He and the evolutionary biologists in Plön, who also study the conditions for cooperative interaction, therefore designed an experiment simulating the negotiations at the climate change conferences.

Failure to meet the intermediate target jeopardises the assets

The scientists created numerous groups of six students each. The students were allocated real euros as operating funds and an additional larger sum of money representing the public assets of an economy, which could not be used during the game. Each game played by the members of the group lasted ten rounds. In each round, the players were able to place money from their funds in a common pot. Any funds not donated after the tenth round were kept by the players. If after the tenth round the pot contained at least 120 euros, all players were also allowed to keep their assets. Applied to climate change, this would mean that: together, they managed to limit it to a tolerable degree. If a group failed to meet the target, all players would lose their assets with a 90 per cent probability.

In order to allow for the different behaviour of rich and poor countries, the scientists distinguished between rich and poor players in their game. The rich received 40 euros in operating funds and 60 euros in assets. The poor players received 20 euros to invest in the game and 30 euros in assets. Some groups consisted only of poor players; others only of rich, and some consisted of three rich and three poor players. The groups containing only poor players always missed the target, the rich groups always met the target and the mixed groups met the target in 60 per cent of the cases.

However, this changed if losses became a threat as early as halfway through the game. Such losses could be avoided if players managed to collect a total of 60 euros during the first five rounds. If they failed, they paid for it with a 20 per cent probability of losing 10 per cent of their operating funds and assets once during the following rounds. The intermediate target was met by six out of nine poor groups, and three groups met the final target. All rich and mixed groups managed to collect 60 euros by the fifth round. After the tenth round all rich groups had collected 120 euros. Two thirds of the mixed groups also achieved this and the groups who fell short of the final target were very close to meeting it. The players in these groups still had to go home empty-handed in nine out of ten cases. However, when it comes to climate change mitigation, a near miss could be good enough.

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