Escaping the Greenhouse Gas Prisoner's Dilemma: A Government Solution

By François de Soete

When dealing with a problem like greenhouse gas emissions, individuals and industries alike can help. Only governments, however, can make sure that individuals and industries do help. That is, individuals and companies can decide to collectively reduce greenhouse gas emissions, but without mechanisms that ensure compliance, this type of collective action becomes a prisoner’s dilemma and some will inevitably “free ride” on the emission cutting efforts of others. The federal government, in consultation with key industries and provincial governments, must therefore take the greatest responsibility for reducing Canada’s greenhouse gas emissions by not only implementing an emission reduction strategy that protects Canada’s international competitive advantages, but also by ensuring domestic compliance.

Placing the heaviest burden of responsibility for reducing greenhouse gas emissions on individuals seems at first glance appropriate, given that greenhouse gas emissions are a staple of personal consumption and industries to a large extent respond to demand. This line of thinking suggests that we are collectively responsible for changing our consumption patterns, which would ideally also force industries to reduce output. While we must all do our share to reduce emissions, such efforts can only come to fruition when government-enforced compliance mechanisms are put in place. Without enforcement, collective efforts lead to a prisoner’s dilemma, where each of us is better off by reaping the benefits of reduced greenhouse gas emissions without contributing to the reduction process.

The international arena illustrates just how problematic collective action is without effective enforcement mechanisms. Despite existing international environmental regulations, a handful of “pollution havens” (states that deliberately minimize environmental regulations within their borders to entice foreign capital) spur a “race to the bottom.” That is, the absence of a supranational government enables individual states to host foreign-based high-pollution production facilities. Not only do such states contribute nothing to broader international pollution reduction efforts, but they also gain a competitive advantage in terms of international capital flow. This leads other states to reduce their own environmental standards in order to attract foreign capital, and a race to the bottom thus ensues.

In the Canadian context, then, individuals and industries may collectively aim to reduce greenhouse gas emissions, but the strategic challenges in collective action efforts place an onerous burden on Canadians without any guarantee that everyone will do their share. Further complicating matters is the fact that reduced greenhouse gas emissions would constitute a public good that cannot exclude those who do not contribute to it—and this type of public good can emerge without the cooperation of any one individual’s efforts. As such, free riding becomes the most profitable course of action.

Government intervention is the only way to eliminate this kind of collective action dilemma. Government intervention must, however, strike a fine balance. On the one hand, weak regulations and oversight can instigate defection and free riding, thereby rendering Canadian emission reduction efforts ineffective. On the other hand, excessive regulations can motivate Canadian industries to relocate abroad to countries with less stringent environmental regulations, thereby only reducing greenhouse gas emissions produced in Canada while actually increasing greenhouse gas emissions produced by Canada.

Government regulations must therefore neutralize the threat of free riding by subjecting individuals and industries to appropriately proportional restrictions, while not impinging upon Canada’s competitive advantage in the international arena. The federal government is obviously the only Canadian institution capable of achieving this balance since it not only can pass legislation that applies to all provinces, but more importantly, it can negotiate international regulations that will reduce Canada’s greenhouse gas emissions in proportion to reduction efforts by other countries.

Placing the burden of responsibility on the government to reduce greenhouse gas emissions does not, however, preclude individual responsibility. Each of us can reduce personal consumption patterns and thereby contribute directly by reducing greenhouse gases and indirectly by motivating a corresponding decrease in production. More importantly, however, since the government response is so critical for implementing effective reduction strategies, each of us can provide our government with the necessary mandate to implement appropriate regulations and oversight by making it clear that reducing greenhouse gas emissions is in fact a priority.

Given that greenhouse gas emissions have implications for issues that range from Canadian healthcare to national sovereignty in the Canadian Arctic, reducing greenhouse gas emissions is without a doubt one of Canada’s most pressing issues—our government must take responsibility, for it alone can lead us out of the greenhouse gas prisoner’s dilemma.

Francois de Soete completed a Master of Arts degree in Political Science. Francois is now a Ph.D. Candidate at The University of British Columbia, where his academic interests focus on environmental ethics and political philosophy.