Sunday, October 10, 2021

Why democracies are not stopping climate change

There are at least five reasons why democracies are finding it difficult to stop climate change (I’ll discuss this with my undergraduate and graduate students and see if they find more reasons). Two of these reasons can be labelled institutional (1 and 4), two of them behavioral (2 and 3) and one redistributive (4).

1. Absence of a key constituency. Those that will suffer more the consequences of climate change (future generations) are not here to vote or express their opinion. The current young generation is starting to strongly mobilize to address the climate emergency, but they are still a basically powerless minority.

2. Lack of urgency. Like in many intertemporal problems, our short run self disagrees with our long-run self. Although we are aware that climate change is happening and we basically know the solutions (changing our lifestyle with a mixture of taxes, regulations, subsidies, innovation…), we are unable to take the short run sacrifices that are necessary to implement them.

3. Nudges and other small interventions are crowding out support for strong intervention and relieving the burden of taking costly action. Make no mistake: nudges and small interventions are necessary –but a small part of what it takes to stop climate change.

4. Lack of institutions to enforce international agreements. Global consensus has been reached several times, but then it is not enforced, because of lack of global institutions that mandate the policies that result from the agreements. These institutions should not only be international, but truly transnational and global, with current and future citizens represented somehow. Climate games between countries have the structure of a prisoner’s dilema (“The Economy” chapter 4): the joint payoff maximizing solution is not a Nash Equilibrium, so it requires constant external enforcement.

5. And last but not least (and related to the previous point), redistributive problems make it difficult to enforce some agreements if they are reached at all. Developing countries will not stop their environmentally unsustainable development unless they are compensated, and the same happens with working and middle classes in rich countries. Lobbying can be also interpreted as a distributive problem. Corporate interests in favour of polluting activities weigh more than the interests of ordinary citizens, although they are losing the battle of public opinion.

Unless we address (at least and at the same time) these five challenges, we will face a climate catastrophe.

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