From a game-theoretic perspective, collective action on climate change can be understood through coordination games, the prisoner’s dilemma, and public goods theory, all of which help explain both the incentives and obstacles to cooperation.
At its core, climate change mitigation resembles a multi-player prisoner’s dilemma where each country (or individual actor) faces a choice:
Each rational actor considers their own costs and benefits. Because the benefits of mitigation are shared globally while the costs are borne locally, each country has an incentive to defect, leading to a suboptimal Nash equilibrium where no one takes sufficient action. This results in the well-known tragedy of the commons: the atmosphere is a shared resource that gets over-exploited because no single actor has enough incentive to protect it alone.
If the U.S. cuts emissions but China does not (or vice versa), the cooperating country bears economic costs while the non-cooperating country enjoys the benefits of reduced emissions without making sacrifices. This creates a mutual suspicion problem, hindering cooperation.
Despite these obstacles, collective action does happen. Game theory suggests three key mechanisms that drive cooperation:
In an iterated prisoner’s dilemma, cooperation can emerge if countries expect future interactions. Treaties like the Paris Agreement establish long-term frameworks, ensuring that defectors face reputational costs (e.g., diplomatic pressure, trade restrictions).
Countries or firms that bear the greatest climate burdens may be compensated through side payments or economic incentives. The European Union’s carbon border tax forces non-EU producers to comply with climate policies, coercing cooperation through economic penalties.
A hegemonic actor (e.g., the EU or UN) can serve as a focal point for cooperation. Additionally, climate movements (e.g., Fridays for Future) act as norm entrepreneurs, changing preferences and making climate cooperation an expected behavior rather than a strategic choice.