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Cooperation and Climate Change: Can Communication Facilitate the Provision of Public Goods in Heterogeneous Settings?

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Abstract

International and domestic efforts to reduce greenhouse gas emissions require a coordinated effort from heterogeneous actors. In this context, using a public good game with a climate change framing, the experiment reported here examines whether groups of heterogeneous individuals can meet a collective emission-reduction target through individual contributions. In terms of the framing, participants differ in terms of their marginal costs of abatement. The experiment consists of two games: a counterfactual baseline scenario examining the scope for voluntary cooperation and a communication game examining the role of stakeholder participation in facilitating cooperation. During the communication game, subjects are able to communicate with one another in order to coordinate contribution strategies. The results suggest that relying on the voluntary cooperation of individuals will not be sufficient to meet the mitigation target. Furthermore, while communication plays a role in promoting cooperation, even when heterogeneity is present, the non-binding nature of communication results in significant levels of free-riding. In particular, with the introduction of communication, two dominant contribution norms of free-riding and perfect-cooperation emerge. This outcome emphasizes the importance of sanctioning opportunities in ensuring compliance with mitigation obligations.

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Notes

  1. Stakeholder participation in this context refers to government engagement with various groups of affected individuals in the design of policy. For example, active involvement of coal mining and the oil and gas industries, corporates, non-governmental and environmental organizations, and households in the design of a domestic climate change policy.

  2. Thanks to an anonymous reviewer for making this point.

  3. For example, Fehr and Gächter (2000, 2002) and Anderson and Putterman (2006) find that punishment increases as the differential between individual contributions and average group contributions widens.

  4. The ratio between the marginal value of an experimental currency unit invested in the public account and the private account.

  5. Eckel and Grossman (1996) use a double-anonymous dictator game but frame the instructions by replacing the anonymous recipient with a well-known charity. Altruistic giving is significantly increased. Liberman et al. (2004) conduct a repeated public good game with undergraduate students and Israeli pilots. The game is labelled as the Wall Street Game for half the participants and the Community Game for the other half. Cooperation was significantly less in the Wall Street Game. In a 2-person trust game, Burnham et al. (2000) substitute either the word “partner” or “opponent” into the instructions. Across pooled data, the authors find partners are significantly more trusting than opponents.

  6. Note that this study does not consider the extent to which context affects behaviour. We are rather assuming that context does affect behaviour in a climate change setting and therefore include context in the experiment design.

  7. What emerges is that subjects have clear attitudes about climate change (Appendix A in the supplementary material). Specifically, 77 % of subjects feel that firms should definitely be obligated to meet emission reduction targets, while only 15 % feel that households should definitely be obligated to meet emission reduction targets.

  8. Households have limited avenues with which to achieve significant reductions in electricity consumption; specifically, households can purchase solar water heaters, geyser blankets, replace incandescent light bulbs with more efficient Compact Fluorescent Light bulbs (CFLs), and reduce heating requirements by improving insulation. While expensive for the average household, many of these measures are prohibitively expensive for low-income households. Conversely, in addition to the above measures, the commercial sector can take advantage of “low hanging fruit” (decommission lifts and revolving doors, use timers to switch off lights in buildings and parking lots etc.). It is therefore assumed that capital has a lower marginal cost of abatement relative to labour, and is able to reduce more emissions with one ECU.

  9. In the first tax scenario, both player types must reduce emissions equally, irrespective of the difference in the cost of abatement. As such, all four players (in a group) must reduce emissions by 60 units each. In the second tax scenario, both player-types can reduce emissions by different quantities as long as they contribute the same amount in ECUs. If each player contributes four ECUs, each group will collectively meet the emission reduction target but low-MCA players will be reducing emissions by 80 units each, while high-MCA players will be reducing emissions by 40 units each.

  10. Note further that in both T2 & T3, once games 1–4 were concluded, subjects were asked to vote on which game they would like to play again as the final game for the day. Results from this voting game are not included in this analysis.

  11. ECU/ZAR \(=\) 0.25.

  12. A new envelope was opened at the start of each new game.

  13. With the exception of Baseline 1 in Treatment 1 for the low-MCA player, where the proportion of contributions of zero ECUs (0.324) significantly differs from the proportion of contributions of 3 ECUs (0.206) at the 10 % level.

  14. To control for possible ordering effects, a dummy variable for both treatment and session have been included in the regression analysis (Table 3). Ordering effects are evident for low-MCA players (regression 3). As such, the regressions are replicated for Treatments 2 & 3 separately. The results of which are provided in Appendix F (supplementary material). These auxiliary regressions indicate that communication is synonymous with greater cooperation in Treatment 3 only (regression 2 in Appendix F). Given these ordering effects, the entire analysis is replicated for both Treatments 2 & 3 separately (and compared to the results for the pooled data). Broadly, the results of the current paper remain unchanged. Specifically: (i) free-riding among both player-types is pervasive in both the baseline and communication games in both treatments, (ii) when communication is introduced, contributions are polarized between free-riding and perfect cooperation, (iii) the frequency of perfect cooperation increases significantly for both player-types with communication and (iv) public good provision (in terms of the proportion of groups meeting the target) increases with communication. In addition, the chat transcripts indicate there to be no significant difference in subjects’ negotiation attitudes in Treatments 2 & 3. In both treatments, the majority of groups agreed on a strategy whereby everyone contributes their full endowment to mitigation.

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Acknowledgments

Financial support from the Swedish International Development Cooperation Agency (Sida), through the Environment for Development (EfD) initiative, from the FORMAS program COMMONS and from the African Climate & Development Initiative (ACDI) is gratefully acknowledged. The comments and suggestions from anonymous reviewers are gratefully acknowledged.

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Correspondence to Kerri Brick.

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Brick, K., Visser, M. & Van der  Hoven, Z. Cooperation and Climate Change: Can Communication Facilitate the Provision of Public Goods in Heterogeneous Settings?. Environ Resource Econ 64, 421–443 (2016). https://doi.org/10.1007/s10640-015-9879-z

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