Today, President Obama praised an international deal to phase out emissions of hydroflourocarbons beginning in 2019. Roughly 200 countries signed the agreement, including the US, which carries legal force and which aims to cut such emissions by 80% by 2047. Hydroflourocarbons are a type of pollutant emitted by air conditioners and refrigerators, and as the middle class burgeons in large countries such as China and India, statisticians predict that without this treaty, the widespread adoption of such consumer goods may balloon HFC emissions by 15% per year.
This article naturally reminded me of our discussion of the Prisoner's Dilemma and the "thug" rationale for government, but on the international stage. Without legally-binding emissions treaties, individuals and corporations alike have little incentive to singlehandedly curb their consumption of hydroflourocarbon-heavy air conditioners and refrigerators, because such behavior would carry high switching costs without any guarantee of unilateral behavior among other individuals and firms.* In other words, keeping one's current cooling systems is a dominant strategy, and one that does not lead to a socially optimal outcome. This clear example of the Prisoner's Dilemma provides a rational basis for a legally-binding international treaty, and President Obama's praise is well-deserved.
*It is interesting to note, however, that--contrary to what we might predict--a few US corporations have already switched to more expensive, greener cooling systems. Why? Likely to reap the marketing benefits of appearing as a progressive company. After all, now that the treaty has been signed, the lion's share of companies will merely conform to legal standards by switching, and can no longer market such a choice as "green" or "progressive."
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