Collective Risk and Distributional Equity in Climate Change Bargaining

Date01 January 2022
Published date01 January 2022
DOI10.1177/00220027211027309
Subject MatterArticles
2022, Vol. 66(1) 61 –90
Article
Collective Risk and
Distributional Equity in
Climate
Change Bargaining
Aseem Mahajan
1
, Reuben Kline
2
, and Dustin Tingley
1
Abstract
International climate negotiations occur against the backdrop of increasing collective
risk: the likelihood of catastrophic economic loss due to climate change will continue
to increase unless and until global mitigation efforts are sufficient to prevent it. We
introduce a novel alternating-offers bargaining model that incorporates this char-
acteristic feature of climate change. We test the model using an incentivized
experiment. We manipulate two important distributional equity principles: capacity
to pay for mitigation of climate change and vulnerability to its potentially cata-
strophic effects. Our results show that less vulnerable parties do not exploit the
greater vulnerability of their bargaining partners. They are, rather, more generous.
Conversely, parties with greater capacity are less generous in their offers. Both
collective risk itself and its importance in light of the recent Intergovernmental Panel
on Climate Change report make it all the more urgent to better understand this
crucial strategic feature of climate change bargaining.
Keywords
climate change, collective risk, equity, laboratory experiment, bargaining
1
Department of Government, Harvard University, Cambridge, MA, USA
2
Department of Political Science & Center for Behavioral Political Economy, Stony Brook University, NY,
USA
Corresponding Author:
Reuben Kline, Department of Political Science & Center for Behavioral Political Economy, Stony Brook
University, Stony Brook, NY 11794, USA.
Email: reuben.kline@stonybrook.edu
Journal of Conflict Resolution
ªThe Author(s) 2021
Article reuse guidelines:
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DOI: 10.1177/00220027211027309
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62 Journal of Conflict Resolution 66(1)
Introduction
A recent report by the Intergovernmental Panel on Climate Change (IPCC) under-
scores the urgent need to address climate change, noting that the window of time
over which countries must initiate climate policies to avoid its worst consequences is
as small as twelve years. Given the current stock of gre enhouse gas emissions,
countries must now undertake drastic efforts to keep warming below the recom-
mended 1.5 C. Delaying action any further will increase countries’ risk of cata-
strophic economic consequences of climate change (IPCC 2018).
We investigate two questions related to the scenario laid out by the IPCC. How
does an increase in the risk of economic catastrophe affect individuals’ willingness
to bear the costs of climate change mitigation? And, in light of global inequality in
countries’ vulnerability to climate change and their capacity to prevent it, how do
differences in these two factors moderate the extent to which individual preferences
respond to increased economic risks?
The consensus view of policymakers and scholars is that reducing the cata-
strophic effects of climate change requires an effective and sustainable international
agreement to collectively reduce global emissions. Therefore the imminent threat of
catastrophic climate change lends urgency to understanding how countries’ increas-
ing and differential vulnerability to collective risk affects the costs they are willing
to accept to prevent it. Strategically, collective risk impacts global efforts to mitigate
climate change, and is thus a critical feature of international climate negotiations.
Despite its importance, the topic remains under-studied. In this study, we introduce a
flexible bargaining framework that incorporates increasing collective risk into an
otherwise standard alternating-offers bargaining model.
Recent estimates of the value at risk from unmitigated climate change suggest
expected costs of $2.5 trillion, with substantial risk in the tail (Dietz et al. 2016;
Weitzman 2011). As a stylized representation of these risks, Milinski et al. (2008)
introduce the concept of “collective risk” to describe the a threat of widespread and
catastrophic economic loss posed by unabated climate change (Alley et al. 2003;
Schellnhuber 2006). Given current trends, the likelihood of widespread, collective
risk will continue to increase unless countries sufficiently reduce net global green-
house gas emissions. Of course, not all countries, regions, and individuals are
equally vulnerable to these risks. Likewise, the resources to prevent climate change
are also unevenly distributed.
To investigate bargaining under collective risk, we consider exactly these two
distributional equity factors because they have also been identified as important in
previous studies: the distribution of resources to pay for climate change mitigation
(capacity) and the distribution of the negative effects of climate change (vulner-
ability). Beyond highlighting the crucial importance of ever-increasing collective
risk, the 2018 IPCC report reve als the urgent need to understa nd the effects of
differential vulnerability on bargaining. To do so, models of climate change bar-
gaining must pay more attention to collective risk. The model introduced in this
2Journal of Conflict Resolution XX(X)

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