Can game theory help solve the problem of climate change?

The most basic example of game theory that we have seen is the classic “prisoner’s dilemma.” In this example, as seen below, each prisoner has the choice of staying silent, or confessing. Their consequences depend on their own decision as well as the decision of the other prisoner. If they think in terms of minimizing their own consequences regardless of what the other prisoner chooses to do, they will both choose to confess, leading to a three month sentence. However, if they were able to communicate and we assumed they trusted each other, they could decide to both stay silent, leading to only a one-month sentence.

Prisoner's Dilemma.jpg

Couldn’t we apply these same ideas of cooperation in order to maximize payoff/minimize consequence to climate change, one of our most pressing political, social, and economic issues?

Climate change can be boiled down to the issue of CO2. The Earth can only absorb so much, and everyone selfishly wants to use as much as they can by burning fossil fuels for various day-to-day needs. Global cooperation is ideal, but for the most part unrealistic. The playing field is not equal, due to political, social and economic reasons, and historically, the most powerful countries come out on top, and the least powerful suffer. From a game theory perspective, if all nations cooperated we could hypothetically find an efficient, fair allocation of carbon emissions.

The problem with that idea is that in the real world of international relations, it is nearly impossible to regulate the balance of incentives and punishment of free riders. There is no single global power to be in charge of the regulation. Climate change necessitates cooperation just like the prisoner’s dilemma. If all nations cooperate, we can produce a better outcome for everyone. If one nation gets greedy, which is likely, we will not be maximizing our payoff/minimizing the effects of CO2 in our atmosphere.

We need to begin building a system in which trust is the driving force behind the decisions made. If likeminded people sit at the top of the system, and they preach the importance of limiting greenhouse gas emissions, we can begin to build a worldwide culture in which people are conscious of their carbon footprint every day.

It is a difficult task to make all 7.125 billion people in this world pull in the same direction and feel as though they are on the same team. There are so many people with so many different priorities, needs, etc. Using game theory ideals, we must be able to find a way to align incentives for the greater good of the world.

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