The following question was put the the President of the World Bank, Dr. Jim Yong Kim by my MP, Geoffrey Clifton-Brown
The payoff matrix replicates the dilemma of nations making decisions on climate change. Two nations could decide to pursue a zero-carbon economy and it might cost them say £2billion. However, if a nation’s competitor refuses to convert to zero carbon and pursues a fossil economy then the cost to the nation that opts for the zero-carbon economy rises to £10billion as a result of having to cope with the resulting ecological damage and the loss of competitive advantage, while the cost to the nation that maintains a fossil fuel economy is only £1billion as it is able to seize food and resources from its weaker rival. If on the other hand, both nations decide to maintain a fossil fuel economy, the minimum cost will be £8billion to both from the ecologic damage incurred, but by maintaining competitive advantage neither will be liable for the full cost. The actual costs are immaterial, all that counts is the relative values with respect to the choice, see Appendix B for the pay-off matrix.
The challenge facing nations is that the prizes are somewhat different, and much more is at stake. Instead of the combined money prize of £1.50 for collaboration, the prize now is survival. Instead of mendacious behaviour being rewarded by a chocolate bar that can be shared with nearest competitors, the prize for mendacious behaviour is that a nation will be able preserve wealth right up to the point of their inevitable extinction. Neither is a great result.
If any optimism can the taken from this, it is that a clear interconnection between the games being played does enable the best collective result to be obtained, but this must first overcome the entrenchment caused by past actions.