Turning lose-lose into win-win
In game theory, the Prisoners’ Dilemma refers to a game where two prisoners are being interrogated separately by an official, and where they will both be better off if they either they both confess or else if both deny the accusation. However, if one confesses and the other denies, then the confessor will be worse off than if he had denied. The catch is that neither prisoner knows that the other is going to say. This game has been influential in economic theory, as a model for competition and collusion in marketplaces, where participants have to act without full knowledge of how others will act.
People have started talking about the action needed for climate change in terms of the Prisoners’ Dilemma game. If all nations act together to reduce their carbon emissions, than we are all better off. However, if one country acts unilaterally to reduce its CO2 emissions, when others don’t do so, then the industries of that country will suffer in comparison with their competitors in the non-complying nations. So, no country wants to move first or to be more harsh than others. The consequence is the paralysis, and tepid proposals, we have seen these last couple of years – Britain’s Minister for the Environment, David Miliband, refers (in this recent FT interview with Fiona Harvey) to an old radio show about two men, each too polite to go through a door before the other, and so both stuck on one side of the door, unable to move forward.
Perhaps some clever economist could come up with a way to get us moving again, despite the Prisoners’ Dilemma.