Scientists placed a plaque commemorating Iceland’s Okjökull (Ok) glacier. They inscribed “a letter to the future” that reads:
Ok is the first Icelandic glacier to lose its status as a glacier. In the next 200 years, all our glaciers are expected to follow the same path. This monument is to acknowledge that we know what is happening and know what needs to be done. Only you know if we did it.
According to the Inter-governmental Panel on Climate Change (IPCC), data since 1961 show a steep increase in per capita consumption of food, feed, fiber, timber and energy, leading to unprecedented rates of land and freshwater use. While the data varies by region, these patterns contribute to a substantial increase in greenhouse gas (GHG) emissions, loss of natural ecosystems, and declining biodiversity. Overwhelming evidence points to severe impacts on food security; terrestrial ecosystems; and the frequency, intensity, and duration of extreme weather events.
While we have a scientific consensus on what needs to be done – as the Okjökull inscription describes – we do not yet know how to get there.
Economists describe climate change as a “global commons problem.” Because no single person or nation owns the atmosphere, no agent has an adequate incentive to act toward GHG mitigation. Even if I reduce my individual GHG emissions entirely, the 7.7 billion people I share the planet with are not going to notice or reciprocate my behavior. The problem gets exponentially more complicated when we consider its intertemporal nature. That is, the costs of mitigation strategies are concentrated among the current generation, but their benefits are dispersed across many future generations. This leads to the infamous “tragedy of the commons.”
Last week, the NDSU Center for the Study of Public Choice and Private Enterprise hosted a panel honoring the legacy of Mancur Olson, an economist and esteemed NDSU alumnus who made path-breaking contributions to our understanding of collective action problems. It seems fitting, therefore, to take this opportunity to think about climate action (a classic collective action problem) through Olson’s lens. In The Logic of Collective Action, Olson writes:
Indeed, unless the number of individuals in a group is quite small, or unless there is coercion or some other special device to make individuals act in their common interest, rational, self-interested individuals will not act to achieve their common or group interests.
Olson’s insight, when directly applied to the climate commons, predicts that no one will reduce emissions without externally imposed regulations at the global scale. However, agreeing on a common set of global regulations is itself a collective action problem. Then there are additional difficulties of implementing, monitoring, and sanctioning such agreements, which are largely ignored in our current civic and political discourse.
Nonetheless, two important lessons can be derived from Olson’s theory:
First, it teaches us that scientific solution is a necessary but insufficient step toward effective climate action. In other words, the presumption that we know what needs to be done ignores the economics of collective action.
Second, the current failure of international leaders and organizations is not a bug but an intrinsic feature of the type and scale of collective action problem under consideration.
Olson’s work motivated a generation of scholars who made further theoretical and empirical contributions to our understanding of collective action problems. Elinor Ostrom, a Nobel laureate, demonstrated that communities are able to devise mechanisms to solve a wide variety of collective action problems and successfully manage their common resources.
Ostrom suggested adopting a polycentric system to address global climate change. Instead of pushing for one enforceable global agreement, which even if attained may not be sustainable, a polycentric approach emphasizes tackling collective action problems through many independent decision centers. This approach allows for experimentation and knowledge-sharing. It also shields us from policy blunders common to monocentric approaches.
A polycentric approach encourages private, public, and social innovation and divides the collective climate action problem into manageable components that can be addressed at multiple levels. Because we do not “know what needs to be done,” we should remain open to a multitude of entrepreneurial solutions. Only the future will reveal which ones worked.
Meet the Author
Veeshan Rayamajhee is a fellow at the Center for the Study of Public Choice and Private Enterprise (PCPE) and an assistant professor in the NDSU Department of Agribusiness and Applied Economics. Read his bio.