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Climate Hustle

Monckton Myth #15: Tragedy of the Commons

Posted on 1 March 2011 by dana1981

Monckton Myths (200 x 70 pixels)In a recent opinion editorial published in The Australian, Christopher Monckton attempted to convince Australians that they should not implement a carbon pricing mechanism to reduce the country's carbon dioxide (CO2) emissions, because such a reduction would have little effect on global CO2 emissions or atmospheric concentrations.

"Cap and tax is as pointless as it is cruel. Australia accounts for 1.5 per cent of global carbon emissions. So if it cut its emissions, the warming forestalled would be infinitesimal.

It's worth explaining exactly why. Suppose the Australian committee's aim is to cut emissions by 20 per cent by 2050. Anything more ambitious would shut Australia down....The CO2 concentration increase forestalled by 40 years of cap-and-tax in Australia would be 10 per cent of 1.5 per cent of that 116 ppmv, or just 0.174 ppmv.....The warming forestalled by cutting Australia's emissions would be...a dizzying one-thousandth of a degree by 2050."

Carbon Pricing and Emissions Limits

As we explored in Monckton Myth #11, Monckton's claim that more than a 20% emissions reduction would "shut Australia down" is not even remotely true.  In fact, we showed that the benefits of carbon pricing would outweigh the costs several times over, even in the legislation proposed in the USA which would have cut the country's emissions 80% by 2050.

If Australia were to cut its emissions by 80% by 2050, the country's average emissions cut over the next 40 years would be approximately 40%.  In a business-as-usual scenario, the atmospheric CO2 concentration in 2050 will be approximately 550 parts per million by volume (ppmv).  Australian CO2 emissions are approximately 1.5% of global emissions, so if the country were to maintain this percentage until 2050, Australia would be responsible for 1.5% of the 160 ppmv increase during that period, or 2.4 ppmv.  If Australia were to cut its emissions by an average of 40% over that period, the difference in atmospheric CO2 concentration would be approximately 1 ppmv.

So Monckton seemingly has a point here.  CO2 emissions cuts from Australia, by itself, would have an insignificant effect on global CO2 concentrations and temperature.  However, Monckton's argument is a perfect example of what's known as the Tragedy of the Commons.

Tragedy of the Commons

The Tragedy of the Commons was first described by Hardin (1968).  It's "a dilemma arising from the situation in which multiple individuals, acting independently and rationally consulting their own self-interest, will ultimately deplete a shared limited resource even when it is clear that it is not in anyone's long-term interest for this to happen."

The global climate is effectively a shared natural resource.  If every nation decides to continue emitting CO2 unabated in their own self-interest, the consequent climate change will be bad for almost everyone.

Game Theory

The concept of Nash equilibrium in game theory provides an analogous scenario.  In our example we'll consider the USA and Australia, each with $10.  Reducing carbon emissions will cost either country $3.  The consequences of global warming will cost each country $7 if no action is taken, and $4 if only one takes action.  The potential resulting outcomes look like this (remaining funds for USA in blue, and for Australia in red):






Emissions Reduced?





7, 7

3, 6


6, 3

3, 3

Either side can only tie or win if they don't reduce emissions, and they can only tie or lose if they do reduce emissions.  Thus it seems to be in each country's best interest not to reduce emissions.  But the best overall outcome is if both sides reduce their emissions, in which case the net economic impact is smallest.  If each country looks out only for its own best interest, the overall economic impact is largest.

It's quite a good analogy to carbon pricing.  A frequent argument used by politicians in most countries is "if our country introduces carbon pricing, businesses will just move to another country where they can emit carbon for free".

So how do you get both sides to reduce their emissions even though it seems to be in the best interest of neither?  Collusion. 

International Climate Conferences

This is the purpose of international climate conferences such as those held at Kyoto and Copenhagen.  Every nation can make the Monckton argument that their emissions cuts alone will have an insignificant impact on global temperatures.  We've heard the exact same argument in the USA, despite our much larger overall emissions than Australia.

But if all nations can come together and agree to reduce CO2 emissions in their own best interests, then the combined emissions reductions and impact on global temperatures can be significant.  But to achieve the necessary global emissions reductions to avoid dangerous global warming, we need all countries on board.

This post was written by Dana Nuccitelli (dana1981), and has also been incorporated into the Intermediate rebuttal to "CO2 limits will make little difference"

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Comments 1 to 31:

  1. I don't know what readers Dana had in mind that would recognize the term "Nash equilibrium". And the table he gave in that context made even less sense: he said "Either side can only tie or win if they don't reduce emissions, and they can only tie or lose if they do reduce emissions."

    BTW: the notation of the payoff matrix also needs to be explained. For many readers, "7,7" looks like 7 and 7/10, NOT 7 for the US, 7 for Australia.

    For that matter, where is the equilibrium? The post should point it out explicitly and explain WHY it is an equilibrium.

    Finally, since, as the Wikipedia article on it points out, the Nash equilibrium DOES often lead to strategies no one would actually implement, since they are both counter-intuitive and on Pareto-optimal. Under such circumstances, the entire discussion of Nash equilibrium does not contribute much in the first place.
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  2. The tragedy of the commons is the core concept facing civilization. And it leads one to observe the greater tragedy as the human failure of understanding and implementing change.
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  3. This is a fascinating subject, and that's where the real challange lies.

    I recommend again the work of Elinor Ostrom, who recently won the Nobel Prize in Economic Sciences for her work on this subject.

    I've read two of her books, and I recommend both, being the first more math, and the second more descriptive of the institutions:

    - Rules, Games and Common-pool resources
    - Governing the Commons
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  4. I posted a similar response here. In order to control CO2 all countries have to cooperate. That is only possible if developed countries with the largest past emissions lead the way so the developing countries can follow. Spain generated 16% of their electricity from wind last year!! If all developed countries did that it would really start to make a difference.
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  5. @ #1 Matt J is right, the chart is backwards. Yes and No should be reversed in both cases.
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  6. The chart is correct.
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  7. There is something odd about the chart, but I don't agree with paulgrace @5.

    The chart details funds remaining. So the on-diagonals (the Yes/Yes and No/No) look correct. What doesn't look right is that countries that unilaterally do reduce emissions cost them $7 (the blue 3 in the top row and red 3 in the bottom). The preceding text suggests it should cost them $4 or possibly $3.
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  8. Michael, we're not as big as Spain but SA produces 15% of its current power supply from wind. It would be more if we hadn't had to abandon a really big wind project because of grid deficiencies in that area.

    I see no reason why other states couldn't do the same. We have abundant coal and gas supplies so we're not using wind because we lack other resources. We've just made a better choice.
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  9. Isn't this the classic Prisoner's Dilemma in another form?

    Two suspects are arrested by the police. The police have insufficient evidence for a conviction, and, having separated the prisoners, visit each of them to offer the same deal. If one testifies for the prosecution against the other (defects) and the other remains silent (cooperates), the defector goes free and the silent accomplice receives the full 10-year sentence. If both remain silent, both prisoners are sentenced to only six months in jail for a minor charge. If each betrays the other, each receives a five-year sentence. Each prisoner must choose to betray the other or to remain silent. Each one is assured that the other would not know about the betrayal before the end of the investigation. How should the prisoners act?

    The position of co-operation and defection is equivalent to the reduce or not reduce position.

    I have heard it also posed as the co-operation go two retreating soldiers under fire, where one must provide covering fire while the other runs. If they co-operate, their survival chances are maximum, but for an individual the selfish solution is to keep running and let his partner engage the enemy.

    Matt Ridley, who has turned into a climate change denier, has a good book on the Prisoner's Dilemma called The Origin of Virtue.
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  10. Alexandre #3,

    Good interview here.

    Interview with Elinor Ostrom

    She takes a more benign view of "the commons" than Garrett Hardin.

    "If you are in a fishery or have a pasture and you know your family’s long-term benefit is that you don’t destroy it, and if you can talk with the other people who use that resource, then you may well figure out rules that fit that local setting and organize to enforce them. But if the community doesn’t have a good way of communicating with each other or the costs of self-organization are too high, then they won’t organize, and there will be failures."

    What happens when the "the community" is the whole world?
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  11. Dana, I think you have over estimated Australia's emissions when an 80% cut is implemented. At present CO2 increases by about 2ppm/year. An 80% cut would reduce this to 0.4 ppm/yr. That is approximately a total of another 50ppm by 2050 assuming a linear decrease in emissions. Of this Australia accounts for 1.5% or 0.75ppm. This is a reduction of 1.65 ppm not 1 ppm.
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  12. Phil #7 - it costs either country $3 to take action, plus the $4 cost from the damages of climate change if only one country took action. Thus if only USA takes action, it loses $3 and $4 (hence $3 remaining), while Australia only loses $4 (hence $6 remaining). That's why it's seemingly in each country's best interest not to reduce emissions.

    Shoyemore #9 - yes, those are also good analogies. Same concept.
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  13. Shoyemore #10

    Thanks for the link, I'll have a look.

    Global warming is arguably the worst-case scenario for common-pool dilemmas: no way to keep new users out of the resource, now central legal system to enforce rules, difficult to monitor, a huge amount of users (everyone in the world, basically), etc.

    Basically we need a rule that respects the carrying capacity of the resource, and a way to enforce it. Self-regulation usually works better then centralized ones, because they're closer to the reality of the resource, and users are more commited to it.

    In the AGW case, I think this can be translated as general goals (both global and each country), but different rules for countries and industries. For example, here in Brazil a tough anti-deforestation law with an adequate enforcement would yield much better results than carbon markets, for instance. But this would be innocuous in the US or Germany.

    Some industries would have good results with a fuel tax, others with efficiency standards (maybe self-regulated ones).

    International treaties will be necessary at some point, but it does not have to start there. I remember the EU made an offer to unilaterally comit itself to emission targets, and made a public statement that they would improve that target if other countries made similar commitments. That's a clever way to overcome such dilemmas.

    Industry standards, including tough import rules would favor exporting countries (like China) to improve their own standards - as suggested by Tom Friedman.

    It's really a huge subject, and I resent the fact that all this effort in responding to denialist crap prevents us to really embrace this much more important part of the debate.
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  15. Shoyemore @9, this is in fact a prisoner's dilemma, which is what makes it so difficult policy wise.

    The trick for effective policy is to turn it into a reiterative prisoners dilemma. In a reiterative prisoners dilemma, participants can choose a policy, and observe how the policy chosen by others. Because there are multiple rounds, it becomes possible to adjust your policy based on the behaviour of others.

    Analysis in games theory shows it is very hard to beat a tit-for-tat strategy in a reiterative prisoners dilemma. In that strategy, you choose the "nice" option first, and then respond to other players by doing whatever they did in their last move.

    In this case, by targeting small steps in reducing green house emissions, you make each successive reduction a new game in the prisoner's dilemma, thus making it a reiterative prisoner's dilemma. Following tit-for-tat, you then reduce emissions in the first round. If others do not reduce, you then do not reduce in later rounds. If others reduce, you continue with further reductions.

    Importantly, the reverse strategy of "defecting" in the first round, and then repeating what your opponents do does poorly in reiterative prisoners dilemmas. As it happens, that is the policy we have been following. We have defected on Kyoto, and defected again last year.

    There is more to this, which I'll probably elaborate when deniers start attacking this analysis ;)

    On a side note, I do not like the terms "tragedy of the commons". It was invented as a rhetorical device to aid a political push for an "enclosure" movement for the high seas. The true tragedy of the commons was, in fact, the enclosure movement in Britain whereby the common law rights of tenants to grazing land, or inheritable leases were repudiated by land lords in order to make large grazing areas for sheep. That tragedy, the deprivation of ill defined, but actual property rights of the poor, by the rich for commercial benefit continues to today in Israel, Indonesia and no doubt many other countries; and indeed was the basis of colonialism.
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  16. The Nash game theory way to determine the correct course of action is valid only if one-sided action has an effect on the outcome. If AGW is really a global, catastrophic problem, then a 20% cutback of emissions by a portion of the world will not have a global impact. The rising emissions of underdeveloped nations will be the determinant. CO2 input into the atmosphere is presented as a global problem, moreover, with tipping points based on gross quantities, not rates of input, as no feedback mechanisms are presented in the models to say that nature will adapt to increased CO2 content without increasing the heat content of the world.

    One-sided action makes sense in three ways. The first is when the act-ers working against the problem show benefits the non-act-ers don't have. As the atmosphere is global and the effects are said to be global, not regional, CO2 reductions on one side won't give anyone any benefit. All cost, no profit. The second is where action is directed not at causes of problems, but their effects: we'd call that adaptation or mitigation. Changes of agriculture, building of dikes, removal of cities on low coastlines, etc. The example of personal benefit would be, of course, not to reduce CO2 emissions but to make mitigation worldwide. The third way is if the one-sided action aims at neither stopping the action or at mitigating, for some, harm. This is in the moral, philosophical or ideological realm. Shut-down your local economy by doing the right thing. However, since the AGW theme is actually catastrophe, not trouble, this way is about having your survivors, if not just God, think you honourable.

    It is said that you cannot cross a large chasm in a series of small jumps. Is A-CO2 emissions as occuring today a problem amenable to mitigating its effects or a developing catastrohe? Or is the global warming battle a physical issue representing an ideological position?

    I'd love an energy efficient lifestyle. More people could live as I do. But if, in spite of the "consensus", the underdeveloped world sees carbon-based energy use more important to well-being than a temperature rise that they, surely, will suffer the most, I do not support ineffective actions on our side. Calvinism is in my family background, but I note that even they gave it up as a poor way to a pleasant, successful life. Which all of us, not just Gore in his castle and Suzuki in his wilderness cabin, have a right to achieve.
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  17. Perhaps, Tom, that would be an argument for long-term agreements that would not require renewal? Binding, as it were.

    Fun political game that would be, the US faced with the option of agreeing to a binding international pact.

    I think, though, that the application of the concept of Tragedy of the Commons here is not a bad analogy. Emitters choose to not limit their impacts because they have no personal incentive to account for the full long term costs of their actions with respect to a public good, so overuse of the public good leads to depletion. Granted there is a twist in this analogy, as the public good - the climate, perhaps, and as used in the article - is not used up, merely altered to the point where it is largely harmful to participating individuals in the long term.

    I also don't think that the Tragedy of the Commons you bring up is the same being discussed here. I think this article is intentionally referring to the hypothetical situation described by Hardin in Science, 1968.
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  18. Tony Curtis:

    Iterative games or actions work when an action produces a result before the next action is required. With CO2 emission controls, this does not occur. A minor reduction in one area may show up as a reduction in the rate of increase, but will not show any improvement as the effect is global. The iterative game requires feedback - positive and negative - in a timely manner that allows the players to change their behaviour.

    A prisoner's dilemma or other such game also requires the game to be run a number of times. Here we have - according to CAGW theory - only one "set". When the results are in, it is too late.

    These arguments are not valid wrt CO2, global temperatures and one-sided actions. Except morally. Or that CAGW is not catastrophic, not a tipping point problem, not an immediate concern and not more suited for mitigation over the long run.
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  19. I said this on another thread and will repeat it here. Free market capitalism has no way of dealing with long term existential threats either to all or part of the system. After the money has been made destroying fisheries, forests, topsoil etc. capital will move on to exploiting the next resource. Unfortunately there is no next earth.
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  20. It is often maintained that Australia's 1.5% CO2 contribution is insignificant. Imagine a world of 100 countries each emitting the same amount of CO2, they would each claim to only contribute 1% and so in Monkton's world, they would each do nothing to curb their emissions. The planet has over 150 countries. Most of them could claim to produce less than 1% and carry on as usual. The per capita measure is the most appropriate figure, for which Australia's is much higher than China's. Each country, and at a smaller scale each individual, must be on board to reduce emissions.
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  21. Monckton advocates adopting a policy of self-interest, irrespective of the cost, because of his fallacious belief that no price need be paid.

    Not the first time Monckton has put forward this point and my response has been – we hang together or we hang (the environment) together.

    In other words, if we absent ourselves from pursuing the common good (GHG emissions reduction) because of perceived short-term political or economic gain, we risk paying a far greater price in the future.

    That price will initially be imposed by countries acting in the common good and in the longer term by catastrophic global warming and sea level rise.
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  22. There is something else wrong with Monckton's argument though. As a major exporter of Coal, a carbon tax could send a significant price signal to those nations that buy our Coal &-therefore-maybe create an incentive for larger economies to use *less* coal. So whilst it might not have much *direct* impact on global CO2 emissions, it could impact it quite strongly through international trade.
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  23. Adelady,
    In Texas they are grid limited for wind in some areas also. A method needs to be developed to finance the wind grid to enable these projects to go forward. It will make money in the end but needs help to get started. This is where government organization can help the market get going.
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  24. Another point to consider though-regardless of its impact on *global* CO2 emissions a carbon tax-if it leads to a genuine reduction in coal & oil use-will result in significant side benefits to our local environment. The burning of fossil fuels is known to produce a number of highly toxic by-products (like benzene, mercury, cadmium, radon & particulate emissions) & the extraction of fossil fuels also does enormous damage to the environment. So a reduction in our use of fossil fuels *will* lead to significantly better environmental outcomes on a local scale.
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  25. Doug Proctor:

    Which all of us, not just Gore in his castle and Suzuki in his wilderness cabin, have a right to achieve.

    This is a common argument, with a grain of truth to it.

    However, when someone in the First World tells me, well-meaningingly or otherwise, that "the underdeveloped world sees carbon-based energy use more important to well-being" than some environmentalist cause, I tend to get irritated. Attempts to speak for the underdeveloped world have a fairly ugly history, and that ugliness becomes more pronounced the more monolithic their views are claimed to be.

    It can't be said often enough that poverty is not a synonym for ignorance or naivete. Many poor people around the world take a passionate interest in local and global environmental issues, and are interested in alternative forms of development (e.g., leapfrogging) and measures of wealth. In some cases, they may even be better informed about these issues than the average American, since problems that are abstract for many of us affect them directly.

    For this reason, and lots of others, we should hesitate to put words in their mouths, or treat them as some rubberstamp for our own ideologies. Instead, we should make an effort to find out how specific populations actually feel about issues like deforestation, pollution, climate change and so on. In other words, we should try listening to them, instead of treating them as a ventriloquist's dummy.
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  26. Alex C @17, no!

    The problem with a long term agreement, even with penalty is that it is a one round prisoners dilemma. You either join the agreement, or not. By turning it into a succession of smaller agreements, you make the process reiterative. Best strategy in a one of prisoners dilemma is to default, while the best strategy in a reiterated prisoner's dilemma is some version of being nice at the start, and then reflecting the play of others.

    The term "Tragedy of the Commons" is used correctly in the main article as it is defined. However, that technically correct usage is a rhetorical device on a par with the various communist nations in the Soviet era calling themselves "Democratic Republics". It is used to justify, yet again, depriving people with traditional property rights of those rights without compensation for the advantage of commercial ventures.
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  27. Doug Proctor @18,

    1) There is immediate feedback from a series of treaties in that you can immediately see who signs and who doesn't, and almost immediately see who complies with their obligations and who doesn't.

    2) By proceding through a smaller number of treaties, you set up a reiterative process.

    3) The arguments are perfectly valid. The question is, do we use our knowledge of game theory to set up a process that can avoid the worst of the coming catastrophe, or do we simply throw it all in the to hard basket, thereby sabotaging (by defecting) those who are willing to give it a go?
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  28. Doug, if developing countries see carbon intensive industry as the "only" way to develop, that would be yet another nasty consequence of historical and virtual colonialism.

    If we are really concerned about this as an issue, then we should redouble our efforts to show, clearly, that the way we chose to develop our industry and society was not the best way. We now have a better way.

    You **can** skip the dirty step - you just have to choose.
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  29. Phila @25,

    Well stated, thank you. As a former resident of Africa I could not agree more with what you said.

    We westerners are by a long stretch (and sadly) totally alienated from nature, and it shows.
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  30. This is a non scientific argument, but it's important nevertheless
    (the Monckton argument is not scientific either, it's the same category):

    Every human has full responsibility for his/her small 1 / 7 billion share,
    and so have the Australians, who in average have a very high CO2 impact,
    and beyond personal responsibility, there is also the social example impact.

    A balance full of rice will shift with one single rice grain,
    and each one grain is equally important as the shifting one.
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  31. About Nash:

    According to Ostrom's findings, Nash equilibrium turns out to be a poor predictor of human behaviour in common-pool dilemmas. It comes closer to reality when communication is absent, but it's an unrealistically pessimistic predictor overall.
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