random room

I have long been thinking about writing a short and crisp text about how simple game-theoretic considerations show that the climate crisis is necessarily an incredibly hard problem to solve. This is something I have not yet seen anywhere. I also didn't look very hard, but given the tendency of many economists to present their unwashed butts at any window they come across I should have expected it to be hard not to stumble upon such a piece of freshman wisdom every second day. But nothing.

Since I couldn't get myself in the mood to actually write the text so far, this morning I decided to ask the new kid in town and prompted ChatGPT thusly:

Can you give a game-theoretic explanation for the unavoidability of the climate catastrophe?”

The result is something I am fully on board with. I do not see much need to add anything:

Game theory is a useful tool for analyzing strategic interactions between decision makers, and can be applied to understand the underlying dynamics of climate change. In particular, the tragedy of the commons game can help explain why climate change is an issue that is difficult to address, and why it has been difficult for nations to coordinate on effective action to mitigate the effects of climate change.

The tragedy of the commons game is a classic example in game theory where a group of individuals share a common resource, such as a pasture or a fishery. Each individual can choose to either use the resource sustainably or exploit it for their own benefit. The problem is that if everyone acts in their own self-interest and exploits the resource, the resource will eventually be depleted, leading to negative outcomes for all. In other words, the individual incentives to exploit the resource are misaligned with the collective interest in preserving the resource for the long-term.

In the case of climate change, the shared resource is the atmosphere, which is being polluted with greenhouse gases. Each nation can choose to reduce its emissions and contribute to the global effort to combat climate change, or continue to emit greenhouse gases for its own economic benefit. However, the problem is that the benefits of reducing emissions are spread out globally and accrue over the long-term, while the costs of reducing emissions are borne locally and immediately. This creates a misalignment between individual incentives and the collective interest in reducing emissions.

Furthermore, even if some countries choose to reduce their emissions, there is still a risk that other countries will continue to emit greenhouse gases, leading to negative outcomes for all. This creates a situation of strategic interdependence, where each nation's decision to reduce emissions depends on the decisions of other nations. Without coordination and cooperation, it is difficult to achieve a globally optimal outcome.

In summary, the tragedy of the commons game and strategic interdependence help explain why climate change is a difficult issue to address. The incentives for individual countries to emit greenhouse gases are misaligned with the collective interest in reducing emissions, and there is a risk that some countries will continue to emit greenhouse gases even if others reduce their emissions. Addressing climate change will require coordination and cooperation at the global level to align individual incentives with the collective interest in preserving the planet for future generations.

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After reading this you'll naturally want to tell me how wrong I am. You can do so on the Fediverse, if you have an account at some instance of Misskey, Mastodon, Pleroma or other service that uses ActivityPub to connect to the Fediverse. Just use it to open the link to this article and you'll be able to reply.