Not knowing the first thing about climate change and climate policies, in what follows I offer a few thoughts as to why from a political-economy perspective tackling climate change proves so difficult, even as it is virtually impossible to deny that human behavior is the major cause of global climate change. The world appears to be in the midst of a sixth – this time man-made – extinction (Kolbert 2014). Some estimates put the speed of species extinction at 1,000-10,000 their natural rate. World temperatures are rising and it is pretty clear that man-made carbon emissions are responsible for the lion’s share of these adverse developments. While planet earth will survive, the survival of the human species for another millennium is not a forgone conclusion. This is so for a whole range of reasons (West 2017), including climate change. So why then is not more being done to fight climate change? Here are is non-exhaustive list of obstacles related to well-known problem of collective action (Olson 1965) and individual-level cognitive biases (Kahneman 2011).
First, the tragedy of the commons illustrates the obstacles faced by global cooperation on climate change (Hardin 1968), that is, self-interested actors undermine necessary cooperation. Public goods don’t get produced and common-pool goods are exhausted as self-interested behavior undermines the collective interest. Free-riding tends to undermine attempts at cooperation. Limiting freeriding is difficult. Any successful attempt requires mechanisms to impose penalties for non-cooperative behavior and, importantly, requires actors who are willing and able to bear the costs of enforcing cooperation.
Second, self-interested actors are often able to internalise the benefits of their economic behavior, while externalising (a share of) the cost of their behaviour. Companies pollute rivers. Countries pollute the atmosphere. This complicates the establishment of binding and enforceable agreements, at least internationally, to the extent that actors well-positioned to externalise environmental costs while internalising much of the benefits of their behavior will be less willing to forego these policies and incur higher net costs than others.
Third, uncertainty about whether or not cooperation can be sustained in a world of legally sovereign nation-states will make some states reluctant to bear the costs of climate policies in the first place if the ultimate success of these policies depends on the continued, long-term cooperation of potential defectors. In Brazil and the US, important countries environmentally speaking, climate change skeptics have recently been elected into office. In other words, even if states recognise the need for collective action and cooperation, the inability to force large states to comply with existing agreements not only makes it more difficult to reach agreement. The possibility of their defection due to domestic political changes has the potential not just to undermine cooperation and international climate policies, but their longer-term success as long as there is a commitment problem and the threat of defection. In political-economic terms, the prospect for successful climate policies is weakened by the two-level games problem (Putnam 1988).
Fourth, the in-group/ out-group cognitive bias is not conducive to sustaining inter-group cooperation. While intra-group cooperation and altruism are well-developed in the human society (Wilson 2012), humans are also prone to inter-group competition (Greene 2013). While what constitutes a group remains up for grabs, political entrepreneurs, and especially states, have proven very adept at mobilising in-groups against out-groups. This makes inter-group, especially inter-state, cooperation vulnerable to defection and breakdown. Why should “Indians” accept limitations on carbon emissions given the less developed state of their economy, compared to, for example, “Americans”? This is not meant to suggest that groups necessarily form along national, let alone ethnic lines, just that group-related biases can and often are mobilised, often at the detriment of inter-group cooperation. Romeo and Juliet ran into trouble.
Fifth, at the level of cognitive psychology, hyperbolic discounting is a problem. Humans are prone to opt for immediate rewards over greater rewards in the future. To the extent that climate change is an inter-temporal problem, climate change policies require depend on the various relevant actors extending their time horizons. This is not easy, especially if short-term economic problems outweigh any concerns about the future state of the environment (e.g. poor, rural Indian). The inter-temporal problem becomes even more pronounced if the distribution of inter-generational costs and benefits is to be taken into account. Attempts to internalise costs (lower present standard of living) by one generation in order to confer benefits to the next generation (less future environmental degradation) often run into significant political opposition (e.g. grey majority and pension reform).
Sixth, humans find it intellectually difficult to grasp non-linear behaviour. While the recency effect may lead humans to overestimate certain low-probability events, humans have trouble dealing cognitively with statistical tails. However, complex systems such as the climate are characterised by non-linear behavior, that is, behavior where small events can have outsized (catastrophic) effects (e.g. butterfly effect). The complexity of today’s human societies arguably makes human civilization even more vulnerable to non-linear change than ever before (Tainter 1988). Human cognition geared towards linearity rather than the possibility of non-linearities is a significant problem in generating support for climate change policies. Com’on, how bad can it be? Right?
Last but not least, judging by opinion polls, a surprisingly large number of people remain far from convinced that climate change is real (at least the US) This may be due to a lack of science education, the increasing use of social media etc. At the cognitive level, it is rooted in the fact that humans prefer simplicity to complexity (Sloman & Fernbach 2017). This may explain creationism’s popularity at the expense of evolution. To the extent that it is necessary to convince people, especially in democratic countries, to support climate policies, it will be necessary to help them overcome these biases and evaluate the odds that climate change is “real” objectively. Populism, social media, the weakening of traditional gatekeepers and the attacks on “experts” aren’t helping.
This is by no means an exhaustive list of the cognitive and political obstacles the formulation and especially the implementation of forward-looking, effective climate policies face. This is not meant to suggest that failure to tackle climate change is inevitable, just that the political and psychological obstacles to be overcome are significant. Perhaps the best hope to tackle climate change is to keep one’s fingers crossed and hope that new technologies (e.g. fusion) will solve the problem. This is presumably what a stalwart of economic liberalism like The Economist would predict that market solutions to environmental problems will emerge; just leave it to self-interest and the invisible hand. As the price of unpolluted food goes up, higher prices will elicit a supply-side response. It is rather more advisable not to pin one’s hopes solely on the emergence of market-based technological solutions. Market failure is more persuasive than orthodox liberals have us believe. Relying on markets at the expense of forward-looking government policies and international cooperation to tackle climate change is bound to prove too little, too late for human civilization – and perhaps even for the human species.
Eco-systems (and human civilizations) did collapse in the past (Diamond 2004). To extent that tackling climate requires forward-looking policies, agreement on the distribution of costs and benefits between actors as well as over time will be a crucial component of any successful solution. Such policies should be flanked by more effective policies to help people (voters and decision-makers) overtime those cognitive biases that help prevent the formulation and implementation of policies aimed at tackling climate change. Such policies will also need to start from the recognition that sustaining cooperative behaviour among self-interest actors is a major challenge.