Experimenting with Climate Change: A Behavioral Approach to Foster Cooperation

Climate change represents one of the great challenges of our times, and has become a policy priority for many countries, most notably Europe. The climate accord reached in Paris in 2015 has provided an important impetus towards legislating climate strategies globally. However, the agreement has not advanced the fundamental issue of climate change, that of enforcing global cooperation. The announcement of the US administration to withdraw from the accord is just one example of the challenges of governing the climate commons. The slow progress of international climate policy and increased recognition of the economic impacts of climate change are promoting the development of additional climate strategies, such as the deliberate manipulation of the climate. Several options exists, and are commonly referred to as ‘climate engineering’. Climate engineering is not a new concept, dating back to the 1960s, and already in the 1990s Tom Schelling argued that it could fundamentally change the economic diplomacy of climate change. Another Nobel laureate, Paul Crutzen, revived the role of climate engineering as a possible strategy to deal with climate change. Climate engineering appears to be very cheap and fast, and the fact that it can be deployed unilaterally at the expenses of other countries has far reaching consequences for international cooperation. Weitzman recently named the possibility of overprovision of climate engineering as ‘free driving’, arguing that it could be an externality as powerful as the traditional one of free riding on abatement of emissions. However, most of these claims are based on speculative reasoning: albeit well rooted in economic thinking, empirical evidence supporting or confuting them is scant or missing altogether.

This project aims at evaluating this extended set of climate strategies in a scientifically robust way. We bring together two strands of literature –behavioural economics and climate change economics- which so far have seen limited interaction, mostly concentrated on the traditional framing of public good games. We plan to test experimentally, using state of art methods based on randomization, whether and how effective cooperation on climate change can be fostered.

The research proposal features several innovative elements. First, we plan to better model and calibrate the science, technology and economics underlying climate change, which so far has been poorly represented in the experimental assessments of climate change. Both cost and benefits of climate mitigation have been oversimplified, and the persistency of the climate change often not accounted for. Second, we plan to investigate key elements of the solution space of climate policy –such as adaptation and climate geoengineering- which are routinely discussed in climate negotiations but which have not been evaluated thus far. This will require developing new games which go beyond the traditional linear public good ones: for example, climate engineering can be seen both as a good or bad good (‘GOB’), depending on how much it will be deployed. Finally, we devise to use more robust experimental methods based on larger population sample and higher external validity, complementing laboratory methods with online and field experiments.

In order to implement what planned, we bring together an interdisciplinary team of top researchers in different but complementary fields. Expertise on behavioral economics and game theory is combined with detailed knowledge on environmental and climate economics and policy. The consortium has proven experience in experimental methods, both in laboratory setting as well as in the field. It also brings significant knowledge on both the science, technology and economics of climate change, having contributed to many leading assessment of international climate change policy, using both models and empirical methods. The partner universities are top institutions in Italy, with international and well established research teams, and a proven capacity to disseminate research to a wider public. The project has the potential to advance both the economics profession, as well as the policy dialogue among the many stakeholders –citizens, government and the private sector- who are called to manage the climate change challenge.

PI: CASARI Marco, Università degli Studi di BOLOGNA

Other Research Unit:

• Politecnico di Milano - Coordinator: Massimo Tavoni