Monckton Myth #15: Tragedy of the Commons

In a recent opinion editorial published in The Australian, Christopher Monckton attempted to convince Australians that they should not implement a carbon pricing mechanism to reduce the country's carbon dioxide (CO2) emissions, because such a reduction would have little effect on global CO2 emissions or atmospheric concentrations.

"Cap and tax is as pointless as it is cruel. Australia accounts for 1.5 per cent of global carbon emissions. So if it cut its emissions, the warming forestalled would be infinitesimal.

It's worth explaining exactly why. Suppose the Australian committee's aim is to cut emissions by 20 per cent by 2050. Anything more ambitious would shut Australia down....The CO2 concentration increase forestalled by 40 years of cap-and-tax in Australia would be 10 per cent of 1.5 per cent of that 116 ppmv, or just 0.174 ppmv.....The warming forestalled by cutting Australia's emissions would be...a dizzying one-thousandth of a degree by 2050."

Carbon Pricing and Emissions Limits

As we explored in Monckton Myth #11, Monckton's claim that more than a 20% emissions reduction would "shut Australia down" is not even remotely true. In fact, we showed that the benefits of carbon pricing would outweigh the costs several times over, even in the legislation proposed in the USA which would have cut the country's emissions 80% by 2050.

If Australia were to cut its emissions by 80% by 2050, the country's average emissions cut over the next 40 years would be approximately 40%. In a business-as-usual scenario, the atmospheric CO2 concentration in 2050 will be approximately 550 parts per million by volume (ppmv). Australian CO2 emissions are approximately 1.5% of global emissions, so if the country were to maintain this percentage until 2050, Australia would be responsible for 1.5% of the 160 ppmv increase during that period, or 2.4 ppmv. If Australia were to cut its emissions by an average of 40% over that period, the difference in atmospheric CO2 concentration would be approximately 1 ppmv.

So Monckton seemingly has a point here. CO2 emissions cuts from Australia, by itself, would have an insignificant effect on global CO2 concentrations and temperature. However, Monckton's argument is a perfect example of what's known as the Tragedy of the Commons.

Tragedy of the Commons

The Tragedy of the Commons was first described by Hardin (1968). It's "a dilemma arising from the situation in which multiple individuals, acting independently and rationally consulting their own self-interest, will ultimately deplete a shared limited resource even when it is clear that it is not in anyone's long-term interest for this to happen."

The global climate is effectively a shared natural resource. If every nation decides to continue emitting CO2 unabated in their own self-interest, the consequent climate change will be bad for almost everyone.

Game Theory

The concept of Nash equilibrium in game theory provides an analogous scenario. In our example we'll consider the USA and Australia, each with $10. Reducing carbon emissions will cost either country $3. The consequences of global warming will cost each country $7 if no action is taken, and $4 if only one takes action. The potential resulting outcomes look like this (remaining funds for USA in blue, and for Australia in red):

		Australia
	Emissions Reduced?	Yes	No
USA	Yes	7, 7	3, 6
USA	No	6, 3	3, 3

Either side can only tie or win if they don't reduce emissions, and they can only tie or lose if they do reduce emissions. Thus it seems to be in each country's best interest not to reduce emissions. But the best overall outcome is if both sides reduce their emissions, in which case the net economic impact is smallest. If each country looks out only for its own best interest, the overall economic impact is largest.

It's quite a good analogy to carbon pricing. A frequent argument used by politicians in most countries is "if our country introduces carbon pricing, businesses will just move to another country where they can emit carbon for free".

So how do you get both sides to reduce their emissions even though it seems to be in the best interest of neither? Collusion.

International Climate Conferences

This is the purpose of international climate conferences such as those held at Kyoto and Copenhagen. Every nation can make the Monckton argument that their emissions cuts alone will have an insignificant impact on global temperatures. We've heard the exact same argument in the USA, despite our much larger overall emissions than Australia.

But if all nations can come together and agree to reduce CO2 emissions in their own best interests, then the combined emissions reductions and impact on global temperatures can be significant. But to achieve the necessary global emissions reductions to avoid dangerous global warming, we need all countries on board.

This post was written by Dana Nuccitelli (dana1981), and has also been incorporated into the Intermediate rebuttal to "CO2 limits will make little difference"