October 24, 2013
Lack of Concern About Climate Protection Misguided
April Flowers for redOrbit.com - Your Universe Online
Collective risks are hard for people to grasp. A good example of this is climate change. Despite annual climate summits, no specific measures have arisen, because people place greater value on immediate material rewards than on investing in future quality of life. To change this, cooperative behavior in climate protection needs to be more strongly associated with short-term incentives, like rewards or being held in high esteem.
The truth is a bit different. Our brains rejoice with immediate rewards, and when we are tempted with such rewards we happily cooperate. A common goal that won't come to fruition for a few weeks dulls the euphoria and cooperative spirit. Our enthusiasm wanes even more when the "reward" is a benefit for future generations rather than ourselves.
Manfred Milinski, from the Max Planck Institute for Evolutionary Biology, led a team of international scientists in showing how poorly we manage collective risk.
"Our experiment is based on an essay which Thomas Schelling, the Nobel laureate in economics, wrote back in 1995", explains Milinski.
According to Shelling, today's generation is the one that would have had to make the efforts for climate protection - future generations would reap the benefits of those efforts. This means that the people of today have very little motivation to do anything.
The research team wanted to know if Schelling's gloomy theory was correct.
To find out, the team converted the problem into a simple experimental situation. Participants played a modified public goods game, which are very common in behavioral economics and always follow the same pattern. Each participant was given a certain amount of money and was then invited to donate a proportion of it over a number of rounds. The research team doubled any monies donated and divided them equally among all players. Any money the participants did not donate went directly into their pocket. The most profitable behavior for any player was to donate nothing at all and simply benefit from the altruism of the other players.
The rules of this game were modified to incorporate averting impending climate change. Each participant started with a fund of $65 dollars. Playing over ten rounds, they were able to decide how much of it to keep or donate. Any monies donated were invested in a climate change advertising campaign and were thus a simulated investment in climate protection. The team provided bonus payments: those groups which donated more than half of their total fund were symbolically able to avoid dangerous climate change and were paid an additional $73 per participant. All the players had a 90 percent chance of losing their endowment if the group donated less.
To model the fact that the benefits of saving the climate are only felt in the future, the team devised three scenarios.
In scenario one, players from successful groups were paid their endowment either the day of, or the day after, the experiment. Successful groups in scenario two were paid seven weeks later, and those in scenario three did not receive money. Instead, their endowment was invested in planting oak trees as a form of climate protection. Over the lifetime of the tree, it will absorb carbon dioxide from the atmosphere and provide a valuable building material for future generations.
Out of the 11 groups offered the prospect of planting oak trees, not one achieved the donation target. These groups paid an average of $92 dollars into the climate account instead of the objective of $194. Seven out of ten groups in scenario one were successful, with the participants donating an average of $175. The scenario two group donated an average of $134, with four out of ten groups meeting their goals.
"The result of our experiment paints a gloomy picture of the future", summarizes Milinski. "We were unfortunately able to confirm Schelling's prediction - it's a disaster."
With all of humanity as players, climate change is the largest public goods game ever played. We are making payments right now that will not show any profit for a long time. Those profits, if any, will be shared among the whole human race. Our generation, and that of our children, will benefit only very slightly from any restrictions we place on our lives today, making our corresponding motivation to place them low.
The results of this study make it clear that if people are to invest in climate protection, they must have short-term incentives to do so. "It's not enough simply to point to the benefits future generations will enjoy", says Jochem Marotzke, from the Max Planck Institute for Meteorology, one of the authors of the study. "Climate protection will only be effective if the people making the effort will also be able to obtain a short-term material benefit from doing so, for instance by exporting climate-friendly technology."