Did Climate Change Just Get Closer to a Solution?

The Lima Accord might be better than it seems.

A model for solving climate change?

Photographer: John Greim/LightRocket via Getty Images

The world's approach to combating climate change, as set out at this month's United Nations conference in Lima, may seem naive: Instead of setting binding limits on the emission of greenhouse gases, the Lima Accord relies on nations to act in good faith and come up with their own voluntary limits in six months' time.

Actually, I think there's reason for optimism. The agreement could actually put us on the path to a lasting solution.

Climate change is typically categorized as a classic "tragedy of the commons." A stable and comfortable environment is a global public good, a shared resource for all, but every individual nation has an incentive to keep using fuels that threaten to destabilize the environment. As a result, the pursuit of narrowly defined interests can end up making everyone worse off.

A simplistic analysis -- based on rudimentary game theory, for example -- suggests only two solutions: Set up a supranational institution that can impose greenhouse-gas limits on individual countries, or put a price on emissions by giving private enterprise the power to charge for them. Otherwise, nations will go on pursuing their self-interest because that's what they expect others to do.

Fortunately, the reality isn’t necessarily so simple. The late political scientist and Nobel laureate Elinor Ostrom demonstrated how people manage to solve such coordination problems all the time. Lobster fishermen in Maine, for example, developed a system to protect the waters that provide their livelihood. They divided the coastal waters into seven zones, each governed by a local council, with council meetings open to all licensed lobstermen. Through negotiation, these councils have been able to develop and enforce their own locally-adapted regulations to sustain the lobster population and fishing industry, something that would have been nearly impossible to get right through top-down government control.

In this context, the Lima agreement can be seen as a move toward a more natural form of cooperation, in which ongoing interaction, negotiation and shared growth in understanding can lead to a solution. Humanity need not be locked into a choice between disaster or global government just because some oversimplified model says so.

To be sure, overcoming collective dilemmas isn’t easy. Ostrom's work suggests that people succeed only when they can communicate with one another effectively, when they have access to sources of knowledge they all trust, and have ways to settle the disputes that inevitably arise. These mechanisms make it possible to explore diverse solutions and move gradually forward. Otherwise, the parties are thrust back into the realm of simple theory, where failure is assured.

What is encouraging is that the Lima Accord establishes some mechanisms for such a process, even if there's a long way to go. For example, it requires all nations to state their plans prominently on a shared web site, so everyone in the world can see who is acting in good faith and making the largest contribution. This should create an important role for public opinion, and for social norms, which Ostrom found to be crucial in overcoming coordination problems. Adherence to such shared norms – as happens in Maine's lobster zones -- helps to channel the actions of all parties away from narrow self-interest.

So, big surprise: An international agreement, wittingly or not, seems to build on some of the most useful modern insights of how cooperation can be established and maintained. What happened in Lima could turn out to be important.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

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