Game Theory, Common Sense and Global Warming

The rush to try and pass the Carbon Pollution Reduction Scheme in Australia has revealed some interesting arguments in relation to global warming and exposed many of the political forces that exist in Australia and no doubt in the rest of the world. All the arguments were coloured by personal and often illogical views and highly polarised from denail to doomsday. What matterered and what didn't was of less importance than political point scoring. Confusion reigned about cause and effect and rhetoric and false argument abounded. In matters of science there is no room for quasi religous belief lead argument. Surely it is time a little common sense prevailed!

Common sense was a phamphlet written by Thomas Paine during the American Revolution and set out powerful and logical argument for independence from British rule.

Its all about decisions and consequences. Our leaders need to get back to the powerful logic in the decisions they make in relation to global warming and analyse the situation without colour from religion, social justice, politics or anything else. They, like game players presented with choices and consequences need to make rational decisions as scientists are supposed to as part of their training and method.

Game theory is by no means new and insights into what was first encunciated by John von Neumann and Oskar Morgenstern in 1944 are to be found in the writings of Plato and Shakespeare and Actions of Cortez (burning his ships in sight of the Aztecs in South America.)[1].

Thinking about global warming using simple game theory analysis makes it much simpler to understand what we should and should not do in relation to problem so this page is for our leaders to read.

Add to the game solution matrix below the fact that reducing atmospheric CO2 is profitable using TecEco technologies then there are no downsides and their decisions become much easier.

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How TecEco Technology Changes a Simple Game Theory Solution

So our leaders can make rational choices the first task is to reduce all the complex possibilities to simple true or false questions that matter. In the following discussion I'll keep it understandable by not assigning probabilities.

1. Is global climate changing or not?

Recorded factual measurements tell us yes.

2. Is there a warming affect related to CO2 increases in the atmosphere?

The science tells us yes. In 1859 John Tyndall showed that certain gases, including carbon dioxide block infra red radiation and subsequent confirming tests show this to be true. Given this fact in 1896 Savante Arrhenius predicted a general warming trend and we have observed this at least until recently.

The problem is that the science is not that simple and global warming may be happening as a result of CO2 levels in the atmosphere increasing but the globe may also at the moment be cooling slightly as a result of other dominant but influences which are unfortunately however likely to only be short term.

Some scientists are telling us that the earth has actually been cooling since about 2003. Does this mean CO2 emissions are not warming the planet? Should we still be trying to do something about them? We should. Why follows.

The earth is a complex homeostatic system. We know some factors act to cool the planet and others to warm it. Unfortunately politicians and the media tend to confuse the causes and effects.

All the following factors and possibly more must be taken into account.

Phenomenom Aspect Cycle Time Permanency Comment
Milankovitch Cycles Eccentricty 23,000 years At least the last few million years Affect long term climate and are the cause of glacial cycles.
  Axial Tilt (22.1 - 24.5 deg.) 41,000 years At least the last few million years
  Precession 26,000 years At least the last few million years
Cosmic Ray Incidence     Forever or at least since the "big bang " Affect on climate suggested but not really understood.
Global Warming Gases Carbon Dioxide Until we run out of fossil fuels 100 + years

Carbon dioxide is a known greenhouse gas and large quantities are released to the atmosphere every year as a result of burning fossil fuels

  Methane   8-9 years The sudden release of methane from methane clathrates would result in sudden and disastrous climate change. The release of methane from methane clathrates could be the cause of dramatic climate change around 251 million years ago when much of life on earth at the time was extinguished.
  Other Global Warming Gases     Many other gases cause global warming such as nitrous oxide.
Cooling Aerosols Sulfur dioxide Relatively short periods   Sulfurous aerosols are produced when fossil fuels are burned and partly counteract the warming induced by greenhouse gases such as carbon dioxide
Solar Radiation Amount of Energy Reaching earth 11 years   Some argue that solar radiation, which is in a cyclic low at the moment, is why the earth is not heating so much. Sunspot activity which increases with solar activity has a cycle of about eleven years.
Thermal capacity The thermal capacity of large ice sheets, frozen bogs as in the Tundra etc     There is an immense thermal capacity in ice and in particular the frozen muds of the Tundra. Some argue that what is keeping the climate from warming up at the moment is that the energy is going into melting ice and Tundra.
Albedo The reflectivity of the earths surface     The albedo or reflectivity of the earths surface varies with colour and texture. Dark oceans for example absorb more energy than ice. The loss of ice with a high reflectivity or albedo increases heat absorbtion causing more ice to melt.
Ocean Currents       Ocean currents depend on temperature, the shape of the oceans and the earth, salt content and other factors and have a big influence on climate.
Continental Drift       The formation of topography affects climate and oceans currents
Volcanic Activity       Generation of topography affects climate. Releases of gases and particulates to the atmosphere effect climate as well.
Land Use Clearing       Vegetation affects climate.
Wood fires and Smoke       CO2 and smoke affect global warming
Dust       Anthropogenic and natural dust tend to block out the sun and reduce temperatures.

The only safe and sensible position to take given all of the above influences on climate is to not mess with nature, not to create change and do something about reducing the amount of CO2 we are putting into the atmosphere. By not messing with nature I mean it would be very silly to change anything, especially if we do not understand all the consequences even if we have an inkling that they may be disastrous. Isn't this what we all should have learned when we were kids?

The factors that are most likely reducing the rate of global warming right now such as reduced solar radiance and the thermal capacity of melting tundra and ice are relatively short term. Next cycle round in a few years time temperatures will probably start soaring again as a result of increases in atmospheric CO2. Should we falter now we are getting a little temperary respite? Of course not because continuing to increase the level of CO2 in the atmosphere will ultimately have consequences.

The probability of the science being wrong and CO2 not having a global warming affect is very low and for our leaders we will refer to it as the false option. They then have the choice of taking action to do something about it or not taking action. The truth or otherwise about whether CO2 is causing global warming has consequences as does the actions that can be taken to reduce those consequeces and it is the job of our leaders to ponder these choices and consequences. If CO2 is adversely affecting global climate and they do not take action unthinkable economic, political, social and environmental catastrophe will occur, yet if false then they are going to unecessarily spend money or levy taxes that will have recessive consequences. Putting it very simply and getting to the "powerful logic" or common sense of the matter, our leaders are faced with two possibilities and two choices. It is a dilemma they find hard to resolve and so they cloud the arguement with religious dogmatic belief, false economics or spurious science.

If there were no negative or recessive consequences of taking action the decision for our leaders becomes much easier because regardless to whether CO2 is causing global warming or even whether global warming is actually happening, it becomes the only logical course of action. Our leaders will take action to minimise undesirable consequences even with a low probability that the science is false. The TecEco solution to excessive CO2 in the atmosphere is profitable and so it is not possible for them to make a wrong decision implementing it because there are no downsides. There is only one common sense approach and that is to adopt the technology.

Unfortunately our political leaders obviously do not know about our solution and perceive downsides to taking action about the increases in CO2 in the atmosphere and they don't seem to have a clue what to do. They brag about how much more than their opposition they are going to reduce emission by and their blunt approach to solving the problem is to tax it.

The whole Kyoto process is not working because there are downside consequences of decisions to act with blunt instruments like taxes. To avoid these our poor leaders need to try and find a way to minimise these downsides or better still remove them and profit by their decisions. In the pursuit of profit they should think about the CO2 in the air and how we could make money by stopping putting extra up there and getting out the additional amount we have already put there or alternatively and better still, how we could profit by consuming all or more than the CO2 that we produce and put there. TecEco have demonstrated that the latter alternative is feasible and this is John Harrison's great contribution to the world.

Unfortunately technical paradigms fall into the realm of what we call the market and politicians in a rather out of date Marshall, Adam Smith, Keynsian sort of way don't think it wise to get involved in markets. TecEco's can bring the profit of the future (saving our atmosphere) into the realm of real here and now economics. The problem is that there are significant but not insurmountable supply chain barriers to economies of scale before it can enter here and now markets that consider only present costs and benefits and thereing lies the impass.

In the following analysis it may help the reader to think of the techno process as the physical interface of the economy[2]. Taxing emissions may help shift the techno process away from producing CO2 but they are not the easiest, lowest consequence way to solve the problem. The reason is that taxes, whatever form they take are unpopular. Besides, taxing emissions may force change away from dirty coal for example but doing so will not necessarily lead change into new areas that can solve the problem efficiently by changing the technical paradigm. Legal market forces alone have no leadership and therefore alone won't work. We need a technology plan as well to change the composition of the flow of materials and energy as we must do in order to change the underlying molecular flow and reduce net emissions. A technology plan is entirely missing from the world political stage and the right one is the key to making decisions without negative consequences for our poor leaders. We have the ominous responsibility of holding this key.

Economies much either substitute away from the burning of fossil fuels or develop technolgies to use all the CO2 we produce or both. Learning to use CO2 as a basic input to our techno-process is the easist way to solve the problem because it is potentially profitable. Almost all that is living uses CO2 to build with so in the late 90's John Harrison thought we should do the same and set about developing all the required technologies. Now, nearly ten years later those technologies have been developed and are, given any economies of scale, potentially very profitable.

It may be a little unfair to say that just about all politicians in Australia have taken a position on global warming depending on the extent of their lack of understanding of it coloured by their lack of common sense, religous fervour or extent to which they want to use the issue to increase their power. There is sadly however some truth in this as recent events show. There have been many others who have pointed out the deficiencies of cap and trade systems and that the Australian Carbon Pollution Reduction Scheme (the CPRS) is flawed. We agree and for more information on this see our other political pages on www.tececo.com.

A large number of politicians think that carbon taxes are an impost on their business friends and won't move against them. The only sure way to remove this barrier to action is to find profit in implementing technologies and strategies to reduce without consequences and better still profit by reducing emissions and or removing CO2 from the air.

Our leaders are restricted by elections to considering only the short term. Profit is a short term concept. A benefit in the future is heavily discounted to present value reducing then eliminating profitability. The long term benefit of saving civilisation by preventing the development of an atmosphere evolving that is not suitable to our existance means little in terms of present value to business. It follows that the only solution that will work must be short term.The short term benefit of profitably using carbon dioxide right now to make building materials is the solution that can define profit in real here and now market places.

Game theory indicates that we must do something about global warming. If doing so were profitable then there are no downsides in the sort term decision horizon politicians and businesses understand.

The Prisoners Dilemna and Global Warming Politics

The Prisoner's Dilemma is important in decision theory and applies to our response to the threat of global warming.

Two prisoners given the option to confess or not confess their crime, will always both confess, despite the Pareto Efficient outcome of both not confessing. This is because their dominant strategy is to confess as it will always provide them with a greater payoff.

An excellent analysis of the dilemma in relation to global warming and the Kyoto proces that is facing the world is available from the Wharton School of Economics[3].

Anybody out there want to try re-running a similar analysis with a profitable solution to global warming? We would appreciate the assistance.

If I am right the dilemma goes away if there are no negative consequences of taking action just as it does in the simple analysis I have written above.


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[1] See "Game Theory" Stanford Encyclopedia of Philosophy at http://plato.stanford.edu/entries/game-theory/#trees

[2] See defintion at http://www.tececo.com/definition.techno-process.php)

[3] Clemons, E. K. and H. Schimmelbusch (2007). "The Environmental Prisoners’ Dilemma Or We're All in This Together: Can I Trust You to Figure it Out?" at http://opim.wharton.upenn.edu/~clemons/blogs/prisonersblog.pdf