The Anarchic Society and the Global Commons

In light of Paul Frijter’s sketpticism about the possibility of co-ordinated international action on carbon emissions and his recent offer of a wager on the outcome of international action, I thought I’d try to put the economic problem into some of the language of International Relations. After all, the problem is international, and Paul’s wager should extend to specialists therein who are willing to take it. How would the question be framed in IR.

The problem in economics terms is that of a global public good, or tragedy of the global commons. We have a resource that is not privately owned (or can not be owned) such as a village commons, fishery or atmosphere. If we assume homo economicus, or rational self interested agents then the resource will be depleted or polluted. The agents will derive private benefit in doing so, but the costs of their actions are shared amongst everyone and are therefore not taken into account. The aggregate result is not good, but this does not affect the decisions made by each individual. The desire to free ride prevents collective action. To achieve a optimal outcome when agents are homo economicus and the resource cannot be privatised, it is necessary for an external coercive power (i.e the state) to take action and ensure each person takes into account the costs of their decisions.

Now lets move to the international sphere. Instead of individual people as agents, we have sovereign states. When we assume that these states are acting only in regard to their own self interest (as civitas economicus, to coin a barbarism) we get something very similar to the assumptions of Realism. In realism the international system is anarchy because of the absence of a global state to enforce laws. The atmosphere cannot be taken under the ownership of a single sovereign state. Self interested states will free ride, and there is nothing to force them to do otherwise. Thus under the basic assumptions of rational choice/realism, the global commons will be depleted.

Yet these are assumptions. Abstractions. Very useful, but not definitive.

In economics the logic of rational actors causing a tragedy of the commons has been vindicated many times, and has been used to create policy in targeting a large number of environmental problems. But for all its usefulness there are instances where it does not explain observed phenomena. Once such instance is actually is actually found in the name we give the phenomena. If over-exploitation was inevitable on the commons they would not have survived for so long. The people involved were constrained from doing so by social norms and motivations. They forego their own interest to follow the norms and to enforce them. The observed behavior could thus not be explained if we only assumed homo economicus. Elinor Ostrom won a Riksbank prize for describing such systems of social norms and how they have operated in managing commons around the world.

Back to the international sphere. Can the relevant agents here -sovereign states – have such social motivations, and can international society have norms? The Liberal Realist [fn1]school says yes. Whilst the international system is still anarchic and states are self interested, they are constrained by norms in the society of nations. Clearly there are situations where this is true. There is no world state to enforce international law, but it still has effect. Sovereignty itself is a norm that formed in early modern Europe. The self interest of participants is insufficient to explain all participants in Afghanistan or the NATO mission in Libya, but changing norms might. So whilst the basic realist assumptions can be used to understand the behaviour of nations in many contexts, it is not always sufficient.

The question is whether international norms are, or can be,  sufficient to prompt enough agents in the international society to take action. More importantly can actions, weak in themselves (such as the carbon price about the be legislated by the Australian government or the European ETS)  play a role in creating and enforcing a norm of environmental behavior? Paul clearly thinks not, that the urge the free ride is too strong or that an international norm would take too long to develop to prevent enough emissions. More optimistic takes would cite the stated motivations of the Chinese government, especially the way the Australian scheme is referenced. Is there such an optimist from IR  to take Paul’s bet?

I’ll stick my own opinion in here. As far as the Australian scheme goes, the net costs are small and the prospective returns from global action are very large. I’m therefore of the opinion that even quite pessimistic possibilities of the scheme contributing to a global solution would result in a payoff matrix where the scheme is worthwhile. If odds are long but the payoff is sufficiently big, the bet is still worth taking. The payoff in Paul’s bet is mainly gloating value (given the money is going to charity either way), something that I’d value quite poorly. I won’t risk $1000  for that privilege. Investigating adaptation or geoengineering as an insurance policy would still be prudent.

[fn1] Including Hedley Bull, to whose work the title of this post alludes.

 

About Richard Tsukamasa Green

Richard Tsukamasa Green is an economist. Public employment means he can't post on policy much anymore. Also found at @RHTGreen on twitter.
This entry was posted in Climate Change, Economics and public policy, Political theory, Politics - international. Bookmark the permalink.
Subscribe
Notify of
guest
15 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
john walker
john walker
10 years ago

Much of the Bible – the Book of Ruth and the parable of the good Samaritan are some examples- has a thread of the, difficult, extending of empathy from the easy ; empathy for your own tribe, to the hard ; empathy for the tribes you fear, and lastly to the very hard; empathy for people you despise: empathy for losers.

Personally , almost every thing really worth doing makes little sense in a purely rational self-interest calculus.

Paul Frijters
Paul Frijters
10 years ago

Richard,

the nation-states as conscious rational actors in this debate misses several important elements:

1. The limited span of control of governments representing their nation state. Just as the soviet bureaucracy could not mimick a market because they lacked the intellectual means to do so, so do nation states lack the ability to monitor most carbon emissions, policy the digging up of them, and enforce a single pricing mechanism. This is not just obviously true in developing countries where they cant measure GDP to any degree, but is even true here in Australia where only a small proportion is up for measurement.

2. Governments are far less constant and rational than they seem. Governments arise out of an internal political competition and have to survive that continued competition. That temporal and competitive aspect means they lack the means of truly committing to anything over the long-term, and, worse, that with every different shock that comes along (financial crisis, natural disaster, upheaval) there is the anewed temptation to renege on any previous promise.

3. Politicians are far less informed than they pretend to be: precisely because they operate in a political arena, their focus by necessity is on their political survival, their opponents and on the potential to convince voters. As a result, they by and large have no clue as to what they can actually deliver on and what might be true in the long-run. They will pretend to solve your problems because if they dont pretend to solve your problems, you wont vote for them. So, in reality, you and I will be far better placed to decide on the long-run political feasibility of something than actual politicians: given the competition, they can neither engage honestly in such debates, nor do they have the time to work things through.

These complications all go in the same direction, i.e. they all work to ensure emission policies are without hope.

john walker
john walker
10 years ago

Those ‘three points’ also add up to “ensuring” that direct intervention, bio engineering and so on is also without hope

Paul Frijters
Paul Frijters
10 years ago

john,

lots of geo-engineering and adaptation policies ‘merely’ require the cooperation of a few countries, for a short length of time (decades), or they can be syphoned off into some institute that looks after it (natural heritage) without further political will needed. Much more feasible.

richard,

yes, the IR question in the background is very important. I tend to view that through the lense of interest group theory and coordination failure.

Ingolf Eide
Ingolf Eide(@ingolf)
10 years ago

I’m with you, Richard. The odds aren’t good but quite apart from the highly asymmetrical potential payoff, issues like this aren’t linear. The zeitgeist can change, sometimes quickly.

With rare exceptions, politicians don’t lead, they follow. The real question, therefore, is whether shifts in public sentiment are likely. Impossible to know, of course, but these do seem particularly volatile times. The range of possible outcomes may therefore be more open-ended, more indeterminate than usual.

Should domestic national attitudes begin to shift here and there around the world, it’s hard to see how that wouldn’t carry over to international relations.

JMB
JMB
10 years ago

In a cash-strapped and shakey Europe, the rationalists are finding that legislated vandalism, i.e. premature shutdown of a large chunk of their power industry, is not as easy or as benefitial as hoped.

Consider, for example, proposals in the Czech Republic and Poland for new nuclear power plants and forecasts of a difficult winter and fleeing industry.

Here’s an example:
http://www.thelocal.de/politics/20111006-38039.html?utm_source=email&utm_medium=email&utm_content=218

The comments indicate that there is a tide of opinion running. Where it leads, who can tell?

Pedro
Pedro
10 years ago

The proposition is quite simple. Wait until the big boys start getting serious and then act. There will be plenty of time to work out the best approach in the global context. There are two reasons to not go now, first, penance only makes sense to dummies, second, the best approach will be informed by the global scheme.

“Personally , almost every thing really worth doing makes little sense in a purely rational self-interest calculus.”

I don’t get that at all. Despite being for a nasty right-winger, I like to think I’m pretty generous and helpful to others. Bu, while there is plenty of things I do without any expectation of a return in cash or kind, I don’t do anything that doesn’t give me pleasure. The enjoyment of pitching in an helping those you care about is a pretty big reward. So I am being self-interested. Money is not the only reward in life. One of the really sensible things Mises said is that people are not “rational”, they act purposefully. All values are subjective.

john walker
john walker
10 years ago

Pedro I am pretty agnostic about the ‘best way’.

I suspect that either negative feed back: Book of Job sort of stuff, will solve the problem or the superbly economically engineered global great depression that we seem to be teetering on the edge of, will cut outputs enough to make carbon schemes unnecessary for a very long time to come .

But what would I know?

JMB
JMB
10 years ago

John W, your several biblical references do nothing for my understanding of the way forward. At first, I thought that you had something to say and that the issue was my failure to understand your analogies.

I now realise that you don’t understand the severity and longevity of the global warming problem we all face. It won’t be negated by a reduction in economic activity and a global recession. In fact, it might be made considerable worse, for two reasons:
1. In a severely constrained system, less flexibility is possible, so actions such as rebuilding a large part of the world’s energy systems can’t happen – the old technologies that must be changed if greenhouse mayhem is to be avoided will remain in place, ready to ramp up but unable to be closed down. The Great Depression did not bring about a decrease in atmospheric CO2 levels, only a reduction in the rate at which they worsened. This is true also of the past several years and the GFC. Neither did anything at all to avoid the warming of the atmosphere, they only resulted in a deferral of the inevitable for a short while – a year or two, at most, behind the pre-existing trends.
2. Capital and resourse constrained economies will likely result in negative outcomes such as destruction of forests and decarbonisation of soils, not because people want to do so, but because they have no option when the means of production and distribution are weakened due to lack of money.

One key here is the length of time that CO2 hangs around – hundreds or thousands of years. If a recession or even a huge depression stymies the world’s economies for a decade or two, it means nothing on such a scale – it is only deferring the problem and in no way is a remedy. The resulting wars would not help, either.

In the final assessment, your position is an excuse used to justify society’s persistent failure to act to prevent destruction of our global commons.

Like Easter Island’s residents, we are confronting the self-induced destruction of our own atmosphere, which, like the felling of Easter Island’s last tree, changed the environment for the worse. In parallel with Easter Island, there is a distinct possibility that the next few years will determine whether or not humans will, turn their homeland into a museum for future civilisations to discover in amazent and to contemplate.

The real question is not whether another worldwide depression will delay the final act of this play for a while, but what must be done if we are to avoid the final act altogether. These are matters which will require much more than the compassion of Ruth and the patience of Job to address satisfactorily.

Looking for a silver lining in a depression raincloud won’t do the job either.

john walker
john walker
10 years ago

JMB
Runaway positive feedback : chain reaction greenhouse , provably caused the the biggest mass extinction event of all time Permian Jurassic event. It is very serious.

By negative feed back I meant major long running frequent crop failures, disease and the like, could really drop human activity down enough to ‘save us’.
That is not my idea of a silver lining- The Book of Job is about humility before a creation that we did not create, are merely a small part of which can squash us at the drop of a hat.

As to economics it was my understanding that the economic shambles of Russia in the past decades has resulted in a significant drop in Carbon outputs … am I wrong on this? I Do not see that as being silver either.

“your position is an excuse used to justify society’s persistent failure to act to prevent destruction of our global commons.”

Personally I believe we should do everything we can to prevent a positive feed back loop starting. OK?

JMB
JMB
10 years ago

Thanks, JW. Confusion addressed. “Positive feedback”, as in “increasing amplitude with time” as against “qualitatively better”.

The core differences aren’t differences after all. I’m quite concerned about the likely state of the globe which my grandson must inherit and absolutely flummoxed by the lack of evident urgency to the global response thus far.

Richard T and Paul F consistently bring clarity to the issues they discuss. Club Troppo is well worth the read.

john walker
john walker
10 years ago

Climate change threatens Alps water flow
http://www.canberratimes.com.au/news/local/news/general/climate-change-threatens-alps-water-flow/2317982.aspx?storypage=0

The alps (and the Braidwood region) have not in the past been much affected by El Ninio fluctuations and therefore the changes happening now are not easily put down to ‘normal’ Australian climate fluctuations.

john walker
john walker
10 years ago

Remember the republic debate? Most people wanted a republic but they could not agree on ‘what’ and ‘how’ , so we did not get any sort of a republic. Personally I believe that the same divide and defeat tactics that were used then are being used now.

dz
dz
10 years ago

An interesting article, but I suggest you might do well to do a bit more study of international relations theory.

“Now lets move to the international sphere. Instead of individual people as agents, we have sovereign states.”

Well, no we don’t. We have individual, sovereign states, and transnational organisations, insititutions and so forth. Are you suggesting the UN or NATO or ASEAN are somehow not included in the international sphere?

I’m also not a fan of the assumption that the international system is somehow anarchic by nature. As if this was an unchanging fact. I’m more fond of the constructivist perspective summed up Alexander Wendt succintly when he wrote “anarchy is what states make of it.” That is, a social construction and therefore subject to change.