7 Dec 2009

What's happening in Copenhagen

For some reason, I forgot to advertise the results of the "talk" that I led at MSRI's workshop on Economic Games and Mechanisms to Address Climate Change.

Although the title of my talk was "Discussion: Climate change dynamics in theory, experiments and reality," I turned it into non-ludic game in which China and the US negotiated a climate change treaty.

I was curious to see how the best mathematicians and economists in the world would resolve these opposing interests, but the results exceeded -- in an amusing way -- even my cynicism.

Rene Carmona of Princeton led the China team and Bard Harstad of Kelogg led the US team.

Watch the video of negotiations. Impatient folks should skip to 27:00, where the US offers $10 trillion/year to get its way -- and "wins". (Yes, that's about 75% of US GDP, but the US team claims it's China's money -- because China is buying US debt. Sound familiar?)

Bottom Line Forget morals, rights, justice, theory or efficiency. Money talks in these negotiations.

8 comments:

  1. Personally, I think that values are necessary but not sufficient for systemic change. Same with the machinations of realist drivers. It takes both the will--largely driven by crisis response--and the way--solutions related to technology, scientific knowledge, and also alternative value systems--to make change happen. Further, it's not a linear process, which is why big changes can occur so suddenly (thought they also do creep up on us sometimes). Thus, values can sometimes boost the will as well as providing a way.

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  2. can't we just compare the size of our nuclear arsenals and based on it, decide who rules the world...then we won't have to worry about global warming, justice, efficiency and all those other "small, irrelevant" things...

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  3. Money talks, bullshit walks. (and that is not even in Latin) It is what you say when the other guy is promising your customer the sky wrapped in pretty paper.

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  4. John Ralston Saul in his book Voltaire’s Bastards argues that relying on a single way of knowing can lead to bad outcomes. So he says it is irrational to be too reliant on rational thinking. Other ways of knowing are tradition, emotion, authority, aesthetics. Ethics can be thought of as a way of dealing with common goods like global climate or personal safety or trust in business relationships. We do something individually irrational which turns out to be collectively rational. We agree to not steal from each other because we want to live in a world where we won’t be robbed. We agree to cut carbon emissions because we want Washington and Tokyo to remain above water for our descendents. Justification of ethical behavior goes beyond rationality to get additional backing from all those other ways of knowing.

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  5. David: Congratulations. You have not drawn the flies. The legions of commenting climate change deniers have not found Aquanomics yet.

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  6. I'm leaving "fart" since it's vaguely related to climate change (or politicians talking...)

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  7. If every person in the world were allocated a quota of annual emissions, to be aggregated at the national level, and these were tradeable, then a country which wished to use fossil fuels in development could do so. The benefit would be the development and part of the cost would be the opportunity cost of foregoing a sale to somebody who had insufficient emissions credits for their needs. This approach would not be quite the same as the developed world buying a "win", since the option would still be available not to sell.
    More to the point in negotiating an agreement is that there hasn't even been a meeting of the minds on the rights structure. The US still says it doesn't want to commit to a GHG reduction regime that exempts the Chinese (among others) and the Chinese say they won't sign on to an agreement that locks them into an underdeveloped state. These are both fair arguments which would be resolved by a per-capita assignment of emission quota...as opposed to using a year-based emissions-reduction target (eg, X% below 1990 level), which is both arbitrary and inherently unfair.
    Of course, the US and other developed economies aren't likely to be enthusiastic about the massive reallocation of wealth that such a per-capita GHG scheme would entail. This kind of self-interest brings everybody back around to stalemate in Copenhagen. The responsiveness of politicians to constituent complaints (directly expressed or revealed via polls), is understandably quite marked; after all, they want to please everybody so as to get re-elected. I can't see the population of the developed world suddenly coming around to the need for significant self-sacrifice, though.
    A disastrous change in climate creeps up on us all slowly enough that it is likely the die will be already cast for a century of change (given the atmospheric residence time of major GHGs) before enough public consciousness-raising occurs to convince politicians that it is (electorally) safe to act.
    Half measures won't make any headway. Heck, the Kyoto agreement was a half-measure (or less!), to which we could neither agree nor conform; emission levels have actually risen significantly. I'm just not at all optimistic that effective, timely, change is likely.

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