Cooperative climate action under background risk

TL;DR

This study explores how background risks like pandemics or economic crises affect people's willingness to cooperate on climate action, finding that such risks don't necessarily reduce cooperation.

Contribution

The paper introduces a novel experimental setup combining background risk with real-world carbon offset purchases in a climate protection game.

Findings

Background risk does not systematically reduce the likelihood of achieving collective climate goals.

Participants in the experiment maintained cooperation even when faced with additional uncertainties.

Clear communication and strong incentives can mitigate the negative impact of background risks on climate cooperation.

Abstract

Addressing climate change requires collective action, yet individuals face a collective-risk social dilemma: we must invest in mitigation efforts at a personal cost, with no guarantee that others will contribute, while the benefits are shared globally. Economic theory predicts that the presence of background risk, such as geopolitical instability, pandemics, and economic crises, makes individuals more cautious, potentially reducing their contributions to collective climate protection. As these uncertainties grow, concerns arise that exogenous risks may weaken climate cooperation at a time when it is most urgent. To test this prediction, we conducted an economic laboratory experiment with treatments incorporating background risk into a threshold Public Goods Game framed around climate protection, with real carbon offset purchases linked to participants’ decisions in the experiment. Contrary to theoretical expectations, we find that background risk does not systematically lower the likelihood of reaching collective climate goals. This suggests that, under conditions where climate risks are well-communicated and cooperation incentives are strong, concerns about background risk undermining climate action may be less pronounced than anticipated.

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