Climate Is A Tragedy Of The Commons

The difference between pandemics and global climate change can be instructive in generating adherence to required social behavoirs

As we suffer through self imposed and government quarantine due to the global pandemic of Coronavirus, I began to wonder if it has any similarities to global climate change. I believe that the fundamental phenomenon underpinning climate change also underlies many of challenges in African economies, which is, managing problems of collective action, public goods and the commons.  I believe the game theory of pandemics may be different than that of global carbon emissions, in that each person’s individual fear of catching the virus drives cooperation, where the fear of a distant temperature increase does not.  It's the challenge of mobilizing billions of people, through their governments or individually, that I find interesting. Quartier Populaire When I first arrived in Senegal at the start of this century my uncle drove me immediately to my grandmother's house. My grandmother, who was about eighty years old at that time, was the heart of the family, and the central repository of our family's lore; the only one to grow up in our ancestral village, she carried our Fulani identity better than any of her her descendants.  I eagerly anticipated driving up to my grandmother's house. I was oddly attracted to the wabi sabi, imperfection juxtaposed against beauty, that I found in Senegal. I liked the fact that sand would pile up at the edges of the streets. Cars and trucks parked with two wheels on the curb and two on the street.  Niary Tally, her neighborhood, is what they call a quartier populaire, which is French for densely populated neighborhood. The high density of people created an exciting, dynamic atmosphere. I lived there, at my grandmother's house, and in a rented room down the street for several years, when I was getting my first startup off the ground at the start of this century. Her children all tried to get her to move, but she, close to the mosque and the local market, was happy there.  The challenge, of course, in a neighborhood which is so highly packed, with hundreds of thousands of people jammed a small space, is that it is highly disordered. I remember seeing the kids come out to the street to bring the trash out to the trash truck that came once a week. Occasionally, when the garbage collectors went on strike, little piles of household debris would build up on the side of the streets.  At that point it dawned on me that neighborhoods like Niary Tally suffered from what is called the Tragedy of the Commons, which is an economics term describing the phenomenon of deteriorating public spaces. In tragedies of the commons, individuals do not have an incentive to seek socially optimal outcomes. No one household could clean up after 100,000 other people, even if they had the money and desire to do so. If the rest of the neighborhood was disordered, cleaning up beyond the small space in front of the house, which everyone did, was almost futile.  Occasionally, the neighborhood youth would stage Set Setals, community cleaning parties. Over the years, my companies, sucre Cristal and Jubilé! juice, sponsored several of these events, giving out t-shirts and free juice to the neighborhood volunteers. But, even these small armies of volunteers were unable to fully clean up the place, and, afterwards, the neighborhoods looked almost the same as they did before.  You would think someone could go around collecting money to pay for cleanup.  I often thought about a famous American entrepreneur, the founder of Blockbuster video, who first became a billionaire by starting a garbage hauling company called Waste Management. The challenge with this approach, however, is that some people would refuse to pay, ultimately undermining the collection effort and frustrating those who did pay.  The only way to ensure that a quartier populaire stayed clean would be through an external authority with the coercive power to collect small amounts from each person. In other words it is the role of municipal governments, collecting taxes or otherwise mobilizing resources to make sure streets stay clean.  Global Climate Change But this problem of collective action is not unique to streets in busy neighborhoods.  I'm not sure how many people know or care about the Davos, World Economic Forum, which seems so far removed from real life, but one subject which seemed to dominate the forum again this year, was global climate change.  Most people are focusing on the science of it, increasing temperatures, shifting climates, but I think the real challenge is one of economics. Global climate change is a problem of collective action. The earth's atmosphere is a public good. It protects all of us from the vacuum of space and, in essence, is responsible for making the earth a hospitable place for life. True of public goods, however, where it is impossible to charge for access to it, is that no individual person or even country has the incentive or ability to make sure it stays in good condition. It's like a street in New York city or in Dakar, no one is going to clean up after everyone else. It is up to a centralized authority, the local government, to make sure the street stays clean.  Unfortunately in the case of global climate change, there is no central authority to ensure that we do not abuse our common good, the atmosphere. This is a collective action problem.  Individual countries, incurring the cost of curtailing their carbon emissions will not make a material dent on the climate change problem. Other countries, like the United States, who pulled out of the Paris accords and prior to that the Kyoto treaty, will be free riders, refusing to pay the cost of reducing their carbon emissions. Even China on its own, through major efforts rolling out electric bus fleets, building up its solar industries to a point of oversupply driving companies into bankruptcy, and building nuclear power reactors to supply their huge demand for electricity through non-carbon sources, cannot individually fix the climate.  It will take the concerted efforts of each country in the world to agree to work together on this problem.   Pandemics At the start of this new decade, we are faced with an outbreak of another global challenge, the corona virus pandemic. I believe, however, that pandemics are different from problems of climate change; they are not tragedies of the commons. Movies have helped us to visualize how pandemics can unfold. Contagion, Outbreak, World War-Z and other Hollywood renditions of outbreaks have trained us how to think about real world outbreaks like Zika, Ebola and Covid-19.  In both Hollywood and the real world, governments and individuals cooperate to battle the spread of the virus. Governments enforce quarantines, and individuals wear masks, ostensibly to reduce their chance of catching the virus but also reducing their potential contagion to other people.  The difference between a pandemic and global climate change, both of which have global effect, is that in the case of pandemics, individual incentives are aligned with the socially optimal outcome. People comply with health advisory regulations because they want to protect their own health. In doing so, that also reduces the spread of the contagious agent. This is different from not throwing a candy wrapper on the ground, where there is no personal incentive not to do so.  Perhaps there is a lesson here. How can we align individual incentives with our social goals? Innovations like prizes awarding people who exemplify pro-social behavior could help to change incentives and align them with the greater good. The Mo Ibrahim Prize for leadership, championed by one of Africa’s greatest private sector entrepreneurs, is a great example of this applied to the social objective of good governance.   Another approach is to punish non-compliance. Transparency International, a global listing of the extent of government corruption, shines a light on bad behavior, and relies on social sanction to change behaviors, albeit in a more negative way than Mo Ibrahim’s award.  Innovation’s role Whether or not you believe in the science of climate change is not important. In some ways, belief in the science of climate change is like believing in God. Most people do not fully understand how climate change works, they take the word of the present day clerics, the all powerful scientists, who hold access to knowledge of the way the world works. Even scientists cannot know with certainty how the complex system of the weather works; in fact, as we learned in the movie Jurassic Park, where a character explained the butterfly effect, chaotic complex systems like hurricanes, turbulent water, and traffic jams are theoretically impossible to predict. But what we can agree on is that there is an economic phenomenon whereby people are incentivized not to contribute to the collective good; no-one has an incentive to reduce their output.  A corollary to the problem of global climate change particularly impacting developing economies is the drastic decline in air quality associated with greater levels of industrialization and urbanization. Increases in airborne global particulate matter are contributing to higher rates of disease including chronic obstructive pulmonary disease (COPD), asthma, lung cancer and stroke. While climate change can at time seem a distant threat, deteriorating air quality is making people sick right now. A corollary to the problem of global climate change particularly impacting developing economies is the drastic decline in air quality associated with greater levels of industrialization and urbanization. Globally increases in airborne global particulate matter are contributing to higher rates of disease including chronic obstructive pulmonary disease (COPD), asthma, lung cancer and stroke. While climate change can at time seem a distant threat, deteriorating air quality is making people sick right now. We at Wuri Ventures are supporting two innovative startups adressing this issue. One a Kenyan medical devices team is using machine learning applied to lung sounds to diagnose lung disease, which promises to drastically lower cost and to increase access to pulmonary diagnostics tools across the world. A Senegal based team is launching a renewable energy electric vehicle mobility startup. In a continent that imports nearly $100 billion of petroleum per year, renewable energy for transportation can contribute to improving air quality and reducing the importation bill. At Wuri Ventures, we focus on problems of collective action and complex systems, which can potentially be solved through innovation. We hope innovative startups will emerge to provide solutions to these problems, and we look to support their entrepreneurial journeys.