Game Theory and Trump's Climate Negotiations

The run-up to the announcement by President Donald Trump on Thursday that the U.S. was withdrawing from the Paris climate agreement illustrated the inconsistent approaches being taken by America and other major countries. The longer this persists, the greater the possibility that America’s pursuit of short-term benefits in certain areas would come not just at the risk of longer-term damage, but would also undermine an overall global construct that has served it well and could still do so over time.

After earlier threats to dismantle the North American Free Trade Agreement and impose punishing tariffs on China and Mexico, Trump alerted the other 194 signatories of the 2015 Paris accord that the U.S. was thinking about withdrawing from this laboriously negotiated agreement. This was met with dismay from several leaders of U.S. industry, countries, the United Nations and the Catholic Church, among others. It also led other systemically important countries to announce a commitment to abide by the terms of the agreement, regardless of what the U.S. ended up doing.