Problem-Solving Versus Negotiating
I want to talk about the, the nature of the negotiating process and more generally, the nature of the problem-solving process of the 193 governments that are party to the UN Framework Convention on Climate Change.
Let’s go back to an earlier picture, really the core of the logic of negotiation itself. Remember we talked about, in the first chapter of this lecture, the idea that negotiations are to improve the situation of all the negotiating parties relative to the business-as-usual.
It’s to move to what we called a Pareto improving outcome. In this diagram from the business-as-usual point that is lower in possibilities for all countries to the cooperative equilibrium “C” in which both groups of countries shown in this figure are better off, and because climate change is, after all, potentially such a calamity, moving to a situation better than the one that we are facing in business-as-usual terms is evident, evidently possible. And yet, the negotiations have continuously proved to be extraordinarily difficult; that’s why we’re aiming for a real solution at COP21 that we might have thought would come in COP1 in Berlin in 1995 or COP3 as was attempted in Kyoto or COP15 in Copenhagen when it seemed that the world was coming close to making a meaningful breakthrough.
What are the reasons why it has proved so hard to go from that BAU point to the point “C”, the cooperative Pareto improving negotiating outcome?
I think that there are at least eight reasons that make climate negotiations just incredibly hard compared to almost any other kind of negotiation that one might consider, and it is worth it for us to think about those difficulties, those uncharacteristic difficulties making this issue so distinct in order to overcome these obstacles.
The first problem is that going from BAU to “C” is not an immediate process. Sometimes when you negotiate you’re better off when you get up from the table and you say, “ok we’ve made an advance”, but when it comes to climate change we’re talking about a transformation of the economy, of the energy system, of our technologies, of our behaviors stretching over decades, and we’re talking about seeing gains from that that also will show up mostly over decades and so negotiating over a very long-term process is inherently more difficult than negotiating over an outcome that gives the immediate gratification of an improvement relative to the status quo.
There’s a related but distinct second challenge and that is that when it comes to the actual improvements, that is why C is “better” than BAU, we’re not going to see those improvements for a long time, not just that it is a long time to realize the change, but the costs of action will be borne predominantly within the next two or three decades, whereas the benefits will be felt predominantly in decades to come. And so we have the costs up front, the benefits later-delayed gratification; not the simplest thing for humanity in general for any of us and certainly not the simplest thing for politicians to manage. They are immediate gratifiers to the ultimate extent; they want to win an election; they want to stay in power, so they’re looking at the short term. But, we have compressed in that negotiating diagram short- and long-term and saying that going from BAU to C is an improvement is simplifying a much more complicated situation where costs come early and gains are likely to be felt only much later.
A third problem that is obviously fundamental is that in many negotiations when you shake hands and have reached an outcome, you know clearly you’re better off, but when it comes to climate change there are enormous uncertainties, not the uncertainties that justify climate denial–this is pure anti-science—the basic science is overwhelming. But, there are uncertainties about technologies, there are uncertainties about future costs, there are uncertainties about the specific timing of climate events, there are uncertainties about the capacity to adapt to climate change rather than to mitigate climate change.
This is technically, scientifically, socially one of the most complex issues that humanity has ever faced because it’s global scale, because it goes to the heart of the economic system, because it involves a complex planetary dynamic, and these uncertainties, of course, enable doubt to be magnified, to be manufactured as has been said, into paralysis.
Of course, there is uncertainty. This doesn’t mean a failure, that we should fail to act, but it is one of the reasons why it is so difficult to act.
The fourth element is that with the timeline and the timing and the uncertainties, the transition required in going from BAU to C is not simply stated. It is not self-evident and transparent, nor is it the product of a small number of actions.
We’re talking about transformation of the core of the energy system. We’re talking about changes of land use on a global scale. We’re talking about changes in agriculture that engages hundreds of millions of people around the world. There is nothing simple about this. We’re talking about an enormously complex process of change even if we could agree fully on what needs to be done and how to do it, we would then, and we will, I hope, face the challenge of implementation that itself will prove to be one of the most daunting aspects of this whole issue.
The fifth aspect that makes this so hard is the, the little fib that is shown in the simple diagram of going from BAU to C. I’ve drawn that picture of two symmetric negotiators, and the improvement is also symmetric. The arrow points up on a 45 degree line from, from the origin of the, of this graph. In other words, the countries are sharing equally, and it’s pretty easy to define in this simple diagram what equal means, but there is nothing equal about the status of the countries that are at the table.
There are huge, powerful asymmetries around the table. Some countries are fantastically rich and others are desperately poor. They have very different points of view. The rich countries often think, “we can impose a solution on the poor”, and the poor countries think “why are we even here being asked to do something when the rich have caused the problem and have the means to solve the problem.” There are big differences in how countries are feeling the advent of anthropogenic climate change.
The small island states know, they know in their gut their country could absolutely disappear under the waves. With rising sea levels, countries are threatened with their very survival, the case of some of the small island states.
Some of the big, northern, more temperate zone economies, Canada or Russia, may feel a little bit warmer, well, maybe not all bad; we’re a pretty cold climate much of the year. The sense of peril may not be felt, may not even be as dramatic as is experienced in an island or in a dryland country or in a tropical setting.
Countries really differ by the nature of the damages and harms, though it is absolutely the case no country will be able to stand-alone in a world profoundly perturbed and disrupted by large-scale climate change. Countries also differ, of course, tremendously in the ownership of energy resources, especially fossil fuels. Some countries are fossil fuel-rich, and they are typically saying, “we plan to use those fossil fuels, thank you”. Other countries don’t have fossil fuels; maybe they even have vast renewable alternatives and they’re saying, “stop the fossil fuels. Let’s move to alternative form of energy”. It’s easier for them to say that, more convenient. Not only do they not feel the lobbying pressure from the owners of the fossil fuels, but for countries that don’t have their own fossil fuel resources, the alternatives look more promising and more secure.
This are just some of the very strong asymmetries that make negotiating more difficult, that make defining a fair or focal bargain that says “yes that’s the point on which we should all agree”–a more daunting task.
This comes to another point, what is fair? If we were all the same and symmetrically placed around the table, fair would be quite obvious. If a group of individuals is dividing the cake, and there’s no other reason, in terms of division, to do otherwise, you try to divide the cake in as close to equal pieces as possible. But, because of the asymmetries, every country has its own standard vision of what’s fair.
Poor countries talk about fairness in terms of wealth and poverty. The highly vulnerable countries, like the small island states, understandably, talk about fairness in terms of impact of climate change. The fossil fuel-owning countries talk about fair in terms of the right to use their own resources. Other countries talk about fair in terms of an equal allocation of the atmospheric space for greenhouse gas emissions, and so on.
These are all aspects of fairness, and the fact that there are so many different perspectives, of course, means that reaching an outcome–not that it’s impossible because countries could all say, “even though we differ in our moral judgments, ethical judgments, sense of fairness, we’re all better off at the following point”, but it does make it harder to find that point.
Then, as we discussed in the case of the Prisoner’s Dilemma, there’s a huge problem of trust. “Okay, we could agree, but how do I know you’re really going to carry that out. I have to go back to my parliament or my congress or my party and explain what I’ve committed to and they’re going to say, ‘you committed that when the others are not really going to follow through.'”
This is a standard problem of any kind of agreement. In an arms agreement, the peace negotiators may come home to find huge objection by saying, “you have entrusted our country on the basis of a promise that will not be fulfilled by the others.”
So, the whole question of finding a binding solution, one that can be monitored, one that can be verified is a part of negotiations.
Here just as it has long been a major part of arms limitation agreements and other kinds of geopolitical negotiations. And then the eighth point is, of course, very particular, powerful interests. Some of these interests are enormously concentrated. Some of the big oil companies, of course, face almost an existential question, “if we’re going to have a 2-degree C limit, what happens to us?
What happens to our multi-gazillion dollar capitalization in the marketplace? How will investors value us?” What will happen, asks the CEO, to my wealth, to my income, to my pension, to my position? And, put it the other way, some of these interests are extraordinarily powerful. They’re major political powers in their country, and they are able to shape the political discussion and the national negotiations.
And, of course, individual countries around the table also can play that role. It’s probably the case that if there’s a vast consensus about what to do, to unanimity, will not be the rule. But if any of the major countries–China or the United states or India or the European Union–say, “No way!” that makes a deal extraordinarily difficult, and so individual countries can play a pretty decisive role in blocking an agreement even one that has been agreed by dozens and dozens of other countries.
you might say, “that’s pretty exhausting”, and it has been exhausting because we have gone through 19 Conferences of the Parties. We’ll have the twentieth in Lima in December and the twenty-first in Paris in December 2015 and still no breakthrough. But, it may be in part because we have been looking at this whole issue in the not quite correct way.
If the negotiations are viewed as a largely zero-sum game that “I can’t make a concession because you’re going to get the big prize” or “you do more, I do less” or “you pay for it, I don’t pay for it” or “you have your historical responsibility, I don’t have to participate”; when it’s viewed as one versus the other, then all of these problems that I have discussed are brought to the fore.
If, however, the sense of the discussion around the table were somewhat different starting from the point “we are collectively in a mess; it is a horrendous problem facing everybody in the world, and we’re all in this together”, then the spirit of these discussions could be quite different. And I would compare this in the following way. One might view this as a poker game. Each negotiator is holding their cards, looking across the table. The US negotiator is looking at China; “what are they doing? What are they promising?” The Chinese negotiator is looking back at the US and casting a glance over to the European Union. Each side is wondering who is going to take the pot; how are we going to divide this?
But a quite different view would be the same group around the table; the men and women’s sleeves rolled up saying, “My God, what are we going to do? This is a horrendous problem. We’ve got to figure this out.” So it would be less of a poker game and more of an intense brainstorming and problem-solving; the kind of thing you’d see in a movie as world leaders get together pondering what to do about the asteroid coming towards the earth or the alien space invasion that suddenly unites all of humanity into a common force because the problem is external, shared by everyone, and requiring creativity, fortitude, bravery, brainstorming, far-sightedness.
And yet another analogy that I find very important and compelling is the idea of an orchestra; brainstorming, sleeves rolled up and trying to figure this one out. An orchestra is trying to make beautiful music together.
In other words, trying to implement a solution. The solution could be a wonderful symphony or the solution could be deep decarbonization. Now, one might immediately ask, “if it’s an orchestra, if the world’s to make beautiful music together, where’s the conductor? How is this going to be brought about?” And that in recent years is drawn my attention to a phenomenon known as the conductor-less orchestra. Here, you’re looking at Olin conductorless orchestra. They are a chamber orchestra playing beautiful music together; well worth listening to on Youtube. There’s no conductor. There is no single individual. There is, however, a score.
They all have the score in front of them. They’re playing to the same sheet music. That I believe is the closest analogy, at least that I can come up with, to what we ought to be doing. We do have the same sheet music; we have the 2-degree centigrade limit. We know what we need to do in terms of the global performance. We could have in front of everybody’s stand the respective deep decarbonization pathways that each country is playing its music, is pursuing its own designed deep decarbonization pathway. There is no single conductor, but in the aggregate, the music makes sense; it does keep the world safe.
So I believe that we are too much thinking of poker players, too little thinking of the brainstormers or the conductorless orchestra, and when it comes to the poker playing what really worries me is that the players around the table are not only looking at their hands, actually all of their cards are blank. They don’t know what’s on their cards or what’s their national interest.
What can they be doing? They don’t necessarily know because they haven’t made the analysis of a deep decarbonization pathway. They may think they’re defending their national interest, but how can you know the national interest unless you have investigated the real benefits and costs of alternative pathways, and alas, that has not happened. And one of the reasons that has not happened is that the players around the table are not quite the right players. That chamber orchestra would not be quite so interesting if every musician was playing a violin. It’s the mix that’s crucial to get the right music, but who’s at the table? The table is the government.
Of course, it’s the diplomats; they are not technologists; they are not engineers; they are negotiating very much from the point of view “don’t make concessions, have the other country make concessions.” Not, “how are we going to get carbon capture and sequestration working more rapidly?” Who should be around the table for this kind of problem solving and implementation? Well, the politicians should be there; they represent the governments that put the public policy into place but also the technologists, the engineers, the scientists who can say carbon capture and sequestration–this can be done if we can overcome the following technical obstacles. Or look at the possibility for energy storage with this technology if we can just push it over the boundary to commercialization then we’d all have much more running room.
The companies should be there as well. Both the established companies and the startups. Now, you might think if the companies are there that’s all lobbying, but I actually want the companies pulled to the table. What are the oil companies doing outside saying, “This isn’t our responsibility.” Just making huge amounts of money, lobbying behind the scenes perhaps to slow things down but not being at the table. When recently some of the big oil companies, Exxon Mobile and others, said, “We don’t believe in the 2-degree Celsius as a feasible goal.” I think that is pure moral hazard or immoral behavior. It’s not for a company, which is a major emitter and a beneficiary of inaction, to decide by itself what’s feasible or not; it has to be there exercising responsibility and indeed following public policy.
And citizens more generally need to be at the table, and that’s why I am going to emphasize shortly in the final lecture the role of global goals that are clear, that are succinct, that are understandable by everybody; this is not a technocrat adventure; it’s not a political insiders game; it’s not a business deal or a lobbyist’s dream; this is a citizen’s issue of the first-order of importance for the world. In the DDPP itself, in our Deep Decarbonization Pathway Project, as Emmanuel Guerin described to you, we had our own brainstorming and negotiating and thinking and working together across 15 countries, we realized, even as a group of strongly motivated, environmentally conscious, determined to help fight climate change group, it’s not easy to get to 2 degrees C; it’s going to require a huge effort even in the modeling itself, much less in the actual implementation.
Even within a project, therefore, you see that the brainstorming, the idea that we need to find our way, step-by-step together to meaningful solutions applies. And that needs to be the spirit around the table as world leaders from business, civil society, government, academia, technologists help to find a path forward. In the next lecture, I’ll talk about how we could help to make the negotiating process fit that purpose and do so in time for success in COP21.