Today’s Climate Policy: Will We Reach a Globally Optimal State or, Instead, Nash Equilibrium?
Today’s climate policy seems more concerned with reigning in the perceived excesses of humanity and the burgeoning, unavoidable inequity produced by hierarchical systems rather than actually attempting to address the warming of the climate. But let’s pretend that everyone involved in global climate change policy is really as sincere as they come across. Let’s also suppose that cutting carbon emissions by moving to electric cars and banning coal-powered plants are great solutions to the problem of greenhouse gas emissions. Apart from a future one-world government ruling by top-down fiat, solvency seems like the first issue climate change activists will run into when attempting to 'change the world.’ The elephant in the room: The biggest transgressor of the Paris Accords is China, a country that, according to the BBC, produces more greenhouse gas than all other developed countries—combined. China understands the rules of the game, and their government won't change its behavior. But don’t worry, the UN assures us that the Agreement is “legally binding.”
Humans, in accordance with their nature, do not have a penchant for curbing their own excesses. But they might be better at curbing others’ excesses if the reigning in is done through competition. This is why I foresee the world reaching a sort of Nash Equilibrium where we still emit greenhouse gases in the name of economic progress, speeding the warming of the climate, meanwhile producing means of limiting the warming. Sure, it isn’t a globally optimal solution or state, but as human beings, we are capable of adapting to inevitable change. Also germane to human nature: While we can be unpredictable, we all have a positive rate of time preference, which is really the reason why China refuses to trammel development in the name of climate change. Instead, it allows its companies to build coal power plants and to pollute in unfettered fashion, effectively nixing any benefit the world could attain through measures to limit climate change. Alternatively, we could all move to nuclear power, saving the environment and lessening global warming that way—but who’s actually looking for solutions?