The Prisoner’s Dilemma and Climate Change

Global temperature anomalies for 2015 compared to the 1951–1980 baseline. 2015 was the warmest year in the NASA/NOAA temperature record, which starts in 1880. It has since been superseded by 2016.

The Science

To understand climate change you just need basic physics and mathematics. The physics works like this. The earth’s surface temperature is governed by the absorption and emission of thermal radiation, and greenhouse gases (GHG) like CO2 and CH4 (methane) trap thermal radiation making the earth’s surface warmer. The mathematics is even simpler. GHG + GHG = more GHG = more warming. It’s that simple.

The connection between the concentration of GHG and warmer temperatures is well-established, with the analysis reaching back at least 400,000 years. If we look at the last few hundred years we find that CO2 concentrations in the atmosphere were 280 parts per million (ppm) in 1750 and have reached almost 400 ppm today. Models project that, unless forceful steps are taken to reduce fossil fuel use, they will reach 700–900 ppm by 2100. According to climate models, this will lead to a warming averaged over the globe in the range 2 to 11.5 degrees F.

What is the cause of the increase in the concentration of GHG in the atmosphere? According to the IPCC, the leading international for the assessment of climate change; the National Academy of Sciences of the USA, the leading scientific organization in the United States; and nearly two hundred scientific organizations, it is now beyond any reasonable doubt that humans are the main cause of global climate change.2 3 4

The Problem

Climate change is already beginning to alter the land, air, and water upon which life depends.Higher temperatures, rising sea levels, droughts, floods, fires, changing landscapes, risks to wildlife, economic losses, and heat-related disease are just some of the consequences of changing the planet’s climate. In addition, there are consequences we can’t predict.

The Solutions

One of the first to understand the problem and propose an economic solution was the Yale economist William Nordhaus. Putting GHG into the atmosphere is free, it is an economic externality leading to a “tragedy of the commons.” The solution forces persons, countries, and corporations to pay for the GHG they pump into the atmosphere, thereby reducing the incentive to do it. He has detailed how to do this in his book The Climate Casino.6 But how do we get multiple countries to cooperate in this endeavor?

The Climate Casino: Risk, Uncertainty, and Economics for a Warming World

Others, like the Australian public policy professor Clive Hamilton, are even more pessimistic. He worries that as we enter the “climate casino,” humans won’t do anything until the situation is critical. His book, Earthmasters: The Dawn of the Age of Climate Engineering, argues that humans aren’t rational actors and this prevents them from doing what’s necessary to avoid catastrophe.7 This will lead to risky technological fixes—to reckless gambling—like spraying sulfur particles into the stratosphere. Such radical solutions will be more attractive to some capitalist than taxing GHG, but there are catastrophic risks associated with high-tech fixes. Still, Hamilton thinks this is what will happen.

Earthmasters: The Dawn of the Age of Climate Engineering

 Why the Problem?

But why is the situation so intransigent? The reason is that humans find themselves in this situation because it has the structure of a Prisoner’s Dilemma (PD). The PD is a non-zero sum game with roughly the following structure: it is one in which we all do better if we all cooperate, yet individually each has a strong incentive not to cooperate regardless of what others do. In the climate change debate, the situation is simple. Consider two countries A and B (for the moment we’ll assume there are only two countries in the world) who have to decide to dump or not dump their carbon.

Country                                                         B
  Don’t Dump Carbon Dump Carbon
A  (S, S)    (W, B)
(B, W)      (T, T)

The best outcome for a country is one where the other country doesn’t dump carbon and your country does since they pay to develop, say, greener technologies or pay carbon taxes while you do not. The second best outcome is where we all share the cost by using alternative energy sources and not dumping carbon. The third outcome is where everyone is dumping carbon and the earth’s atmosphere and environment are being destroyed. (This is the situation we are in.) The worst outcome for a country is if they pay the cost of developing and using new technologies but other countries don’t, and the climate changes for the worse anyway.

Of course, everyone would do better and no one would do worse if we reached the second best outcome—the environment would be cleaner and catastrophic climate change might be avoided. So how do we get everyone to cooperate?

What are the Ultimate Solutions?

There are only a few realistic solutions to the PD. First, we need people to agree to cooperate on the matter by signing a global warming treatise. Of course, even if you could get agreement that still would not solve the problem because you have to guarantee that everyone complies. One way to do this is by negative reinforcement. We would need someone (a world government or the UN) to have the power to punish violators with fines or carbon taxes. Alternatively, we could use positive reinforcement, by offering huge incentives for developing climate-friendly technologies. More radically we could use disablement strategies. We could outlaw oil companies and methane producing factory farms, but this too would demand an international coercive power, hardly realistic at this point.

Perhaps most radically of all, we could use technology to change human nature itself, say by using genetic engineering or neural implants to make us more cooperative. Personally, I think we should take this radical step. We’ll soon reach a point at which we will be forced to try some risky high-tech solution to survive, hoping that our science and technology save us.


1. CO2 concentrations in the atmosphere were 280 parts per million (ppm) in 1750 and have reached 390 ppm today. Models project that, unless forceful steps are taken to reduce fossil fuel use, they will reach 700–900 ppm by 2100. According to climate models, this will lead to a warming averaged over the globe in the range.

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5 thoughts on “The Prisoner’s Dilemma and Climate Change

  1. Problem is explaining this to a public that thinks Jesus, Yahweh or Allah, etc, will save us.

    Problem is explaining high tech possibilities to a public that doesn’t know how its TVs and cars, etc, operate.

  2. We do better responding to a crisis than preventing one in the first place. I wish this was not so, but as professor Clive Hamilton pointed out: “Humans are not rational actors.” If there’s a buck in it, it will be monetized and more made. Technology may bail us out with AI, but I am a little pessimistic having watch the Great Garbage Patch in the pacific grow in size 2 times the size of Texas and 3 times the size of France. A piece here and a piece there and suddenly we’re confronted with a pile of waste 1.6 million square Kilometers.

  3. Climate change; great topic. I live off the coast near Houston and as of just two weeks ago we had catastrophic failure of infrastructure—both water and power. I will lightly address the privatization of our power grid, but what I do know is we were without power for roughly a week and in my marina, it will take another two to three weeks so replace the busted pipes and provide us water due to unexpected freezing. As for the power failure, this was due to deregulation, period. Additionally, we can see the American desert line is shifting eastward thus modifying weather patterns and causing this harm. We just felt the effects and to be quite frank, it sucks. We are now living in post-Katrina conditions and it is deplorable and inexcusable. The greed exercised by these companies and pawned off as “caveat emptor” is sickening. I would be remiss if did not give special exception to Roberto “Ted” Cruz and let everyone know that I request for his immediate resignation on a weekly basis—I’m sure I’m on a watchlist somewhere. My point is that this is real and the devastation is quantifiable and we are going to pay endlessly if it is not addressed. I digress.

  4. And we wasted four years with Teflon Donald—who is still maneuvering for power.

    The GOP and MAGAs have a cavalier attitude regarding the biosphere: almost as if they’re cutting off the nose to spite the face.

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