Have you ever heard about Game Theory, the Prisoner’s dilemma, or the Nash Equilibrium? Probably many of us, and –hopefully- the majority of the policy-makers around the world, studied this subject once. For me, the principle taught by this great subject is basically that if players of the game (namely policy-makers, CEOs, etc.) act in the interests of the group, they are better-off than if they acted in their interests alone (Nash equilibrium). But what happens if not all of those players act in the interests of the group? Then the ones who did, will presumably be worse-off than if they would’ve acted in their own interests. What happens at the end, is that trust is worth nothing, that everyone is paranoid, and no one cooperates, achieving an equilibrium –if at all- that it is for sure not optimal.
Does this sound familiar to you? I would dare to call this the history of international climate policy. Even though there are many nations, with completely different leaders, ideologies, and priorities, there is only one world. Now, if we look at the outcomes of the last Conference of the Parties (COP 17) in Durban, we can see that reaching a binding agreement on such a level is almost impossible (there must be a bit of hope, though), and that some of the most important countries –in terms of CO2 emissions and GDP – do not want to commit for the second five-year period for the Kyoto Protocol.
During some lectures at my University, many of our Professors asked us why some countries would then commit to pollute less, knowing that there are a few very fat free-riders out there, taking advantage of others’ efforts. You know why? Because it is necessary, and because at the end, it is better than nothing! A group starts acting, and probably (and under pressure of this group), others will follow.