This blog post explores why the international community fails to cooperate despite universal recognition of the climate crisis’s severity, analyzing the reasons through the lens of the prisoner’s dilemma, conflicting national interests, and the structure of distrust.
The Real Reason Solving the Climate Crisis is Difficult
Globally, the climate crisis is becoming increasingly severe. As carbon emissions surge, the Earth’s average temperature is rising, leading to more frequent extreme weather events and causing massive human and material damage. Commenting on this situation in July 2023, UN Secretary-General António Guterres stated, “The era of global warming is over. We have now entered the era of global boiling.”
Indeed, environmental problems arising within individual nations have seen some improvement—albeit imperfect—through national policy efforts and citizen participation. However, the issue of carbon emission reduction is fundamentally different. It is not a problem confined to any single country but a common challenge faced simultaneously by all nations worldwide, one entangled with complex international interests. To understand this characteristic, we need to examine the choice structure among nations in greater detail.
The Prisoner’s Dilemma
Let’s illustrate this problem with a simple model. There are two villages, separated by a lake. The residents of both villages share this lake as a source of drinking water and industrial water. However, over time, the lake’s water quality has progressively deteriorated, leading both villages to debate whether to pursue a lake cleanup project. For convenience, let’s call these two villages Village A and Village B.
Cleaning the lake costs a total of $30 million. If the cleanup is completed, each village stands to gain $20 million. The problem is that because the lake spans both villages, it is impossible for one village to clean only its own section of the water. Once the cleanup begins, its benefits accrue to both villages simultaneously.
First, suppose Village A undertakes the lake cleanup alone. In this case, Village A bears the $30 million cost but only gains $20 million in benefits. Doing nothing results in neither loss nor gain, but choosing to clean up actually incurs a $10 million loss. Conversely, if both villages cooperate on the cleanup project, the cost is split equally at $15 million each, and each village gains $20 million in benefits. As a result, each village’s net profit becomes $5 million.
However, from Village A’s perspective, another option exists. Village A can choose to do nothing and bear no costs, instead hoping Village B will undertake the cleanup. If Village B cleans up alone, Village A gains a $20 million profit without paying anything. This is far greater than the $5 million net profit gained through cooperation.
Pushing this logic to its conclusion makes the outcome clear. Regardless of Village B’s choice, doing nothing aligns with Village A’s self-interest. The reverse is equally true: whatever Village A chooses, Village B’s optimal strategy is also to do nothing. From the perspective of the economy as a whole, the lake cleanup project costs $30 million, but it generates a total profit of $40 million for both villages combined, making joint action the optimal choice. Nevertheless, if each village judges solely based on its own interests, the lake will ultimately remain uncleaned.
This problem is structurally identical to the well-known ‘prisoner’s dilemma’ in game theory. While originally a model describing a situation where two prisoners choose whether to confess, applying it to environmental issues preserves the structure of the situation and the incentives for choice. The fact that the outcome of each acting rationally leads to a bad result for everyone provides important insights for understanding environmental problems.
This example demonstrates that when economic actors prioritize their own interests, the best outcome for society as a whole is not necessarily achieved. In a market economy, the ‘invisible hand’ often operates so that when individuals pursue their own interests, overall social efficiency increases. However, this mechanism fails to function properly in situations involving monopolies or externalities. Government intervention is necessary in such cases. The same applies when the Prisoner’s Dilemma arises. As this problem has been studied in economics for a long time, various solutions have been proposed. So, which of these approaches could be applied to the climate crisis and carbon emissions problem?
How to resolve the prisoner’s dilemma?
The simplest and most intuitive solution is to establish a contract and have a public authority enforce it. For example, if the provincial governor or the national government steps in to have the two villages sign an agreement to each bear 1.5 billion won in costs, and imposes a fine exceeding 2 billion won for non-cooperation in the cleanup project, the situation changes. In this case, both villages gain a net profit of 500 million won compared to doing nothing, creating an incentive to agree to the contract. Furthermore, once the contract is signed, they are highly likely to cooperate sincerely to avoid the penalty.
However, this approach is difficult to apply directly to environmental issues between nations. Within a nation, there exists a government with public authority capable of enforcing contracts. However, no international public authority exists that is sufficiently powerful to replace this within the context of international relations. The reason the two villages can trust the agreement is that they trust that if one village violates the agreement, there is a state that can enforce it, and that this will also encourage the other village to cooperate. In contrast, in international relations, the lack of means to enforce obligations on each other makes building trust itself difficult.
Another solution is the ‘person in a hurry steps forward’ approach. Consider a shared living space where cleaning is neglected, or a group project where no one takes the lead. In such cases, the person who can’t tolerate the dirty environment or who values the grade most highly will eventually take the initiative to solve the problem. While this method can be unfair, as the burden falls disproportionately on specific individuals, it ultimately resolves the issue.
However, the situation becomes far more complex as the number of people affected by the problem increases, and as the individual’s effort no longer benefits only them but spreads to affect everyone’s gains and losses. Consider the earlier example where lake pollution is so severe that a cleanup project would yield a benefit of 50 billion won for each village. In this case, even if Village A were to invest 30 billion won alone, the potential gain exceeding the cost makes it likely they would step forward.
However, the story changes if there are not two but ten villages adjacent to the lake. In this case, the benefit from lake purification per village drops to 10 billion won, making it difficult for any single village to bear the 30 billion won cost alone. Even a method where the ten villages share the cost is not easy to achieve cooperation, as there exists an incentive for some villages to avoid the burden and shift responsibility onto others.
The carbon emissions problem also has a similar structure. For example, even if the United States drastically reduces its carbon emissions, if China increases its emissions by the same amount, the global concentration of greenhouse gases will not decrease. The benefits generated by the US reducing its carbon emissions are not solely attributed to the US but are distributed globally. Therefore, from the US perspective, it is difficult to take proactive steps unless the benefits are clearly greater than the reduction costs. For a country like South Korea, with a relatively small economy, the burden of taking the lead in solving this problem is even greater.
Both the experience and repetition of the problem, and securing trust among nations, are difficult
Another method to solve the Prisoner’s Dilemma is ‘repetition’. The collusion problem among monopolistic firms shares a similar structure to the Prisoner’s Dilemma. Companies build mutual trust by repeatedly experiencing the profits gained through collusion over a certain period. Furthermore, since firms that violate agreements can be penalized through price competition or sanctions, cooperative relationships can be maintained for relatively long periods.
However, the climate crisis caused by carbon emissions is not a problem we have repeatedly experienced in the past. Since humanity first appeared on Earth, a global climate crisis of this magnitude is nearly unprecedented. Consequently, many people either fail to fully grasp the severity of the problem or tend to view it as something belonging to a distant future. While experiencing a problem once generally enables cooperation to avoid repeating mistakes, the climate crisis makes such a learning process difficult.
Other environmental problems within nations are relatively more solvable. Water pollution or waste issues can be addressed by governments identifying causes and intervening directly, or by affected nations cooperating to find solutions. There are also numerous examples where technological advances have mitigated or solved problems.
However, the rise in global average temperatures caused by increasing carbon emissions is extremely difficult to drive international cooperation, despite predictions that the consequences will be catastrophic. It is hard for any single country to take the lead, and even if one did, that alone would not solve the problem. Furthermore, it is also difficult for national governments to gain the consent of their own citizens.
So what is the best realistic alternative? It is necessary to strengthen international cooperation, centered on developed nations with relatively higher awareness of the climate crisis, while simultaneously expanding the scope of solidarity by employing both incentives and disincentives towards nations and corporations that are passive in their response. Simultaneously, within each nation, efforts must be made to persuade citizens and foster shared awareness of the problem, transcending partisan differences. Continuous investment in eco-friendly technologies and low-carbon industries is also essential.
Regrettably, no clear-cut solution exists at present. If an easily applicable solution were available, many nations would have already pooled their resources without significant conflict. This underscores how structurally difficult the climate crisis is to resolve. Nevertheless, the world cannot turn away from this problem and must persist with sustained efforts from a long-term perspective.
The economic system sustaining the world today remains the market economy, and it is realistically impossible to completely suppress human desires to consume more and enjoy greater benefits. Rather than rejecting the market economy itself or abandoning economic development, strengthening cooperation at the national level and expanding international agreements is a relatively more feasible approach with promising potential for effectiveness.
