Collective Action on Climate Change: Theory by Mancur Olson

This is a very important topic up for debate since it relates to carbon dioxide emissions and climate change, a massive part of our environment in today’s 21st century. I feel that using Olson’s theory of Collective Action, we learn a lot about how policy makers face a ton of challenges to reduce carbon dioxide emissions due to the nature of public goods and how there always exist free riders in the market who take advantage. I will support my case using Olson’s theory and a few real-life examples as evidence.

Olson’s theory of collective action states that “any group of individuals attempting to provide a public good has troubles to do so efficiently. Public goods have two main characteristics: non-excludable and non-rival. Non-excludable generally means that one cannot be excluded from consuming that product and non-rival means that one’s use does not reduce the availability to others. This is a classic example of market failure since public goods tend to be undersupplied and this means that markets are inefficient. Taking these two characteristics into consideration, the case of free-riders can be further explained. Olson stated that a public good “cannot feasibly be withheld from other members of the group when one member of the group consumes the group – even if those members did not contribute to the provision of the good”. A classic example in this case is taxes. If a certain individual evades paying taxes, no one can really keep that individual away from using public goods that the government provides free of cost such as street lights, use of roads, defense, and so on.

On the one hand individuals have incentives to ‘free-ride’ on the efforts of others in certain groups and on the other hand the size of a group is of high importance and difficult to optimally determine”. In short, Olson’s main goal was to convey that “collective action in large groups is unlikely”. According to Olson, a group means “a number of individuals with a common interest”. He categorized the definition “groups” into three different categories: the “privileged groups in which each member is willing to pay for the provision of the collective good”; the “intermediate small groups in which no one member has an interest in bearing the costs of providing the good, but in which there is some possibility for cooperation because the members are unable to recognize those who are free-riding”; and finally the “latent large groups in which the collective good will not be provided unless one member is willing to absorb the costs of doing so, short of selective incentives”.

In continuation to the above paragraph, the way Olson described how it is easier for small groups to get things done makes a lot of sense why it is immensely difficult for the world to come together as one and make a collective decision on how to combat the carbon dioxide emission and climate change dilemma. Olson mentioned that small groups find it easier to undertake a mutual decision because even if one member feels that the benefits received from the action are large enough and worthwhile, he/she would be willing to pay a large chunk of the costs in order for everyone to receive benefits from the action. For this to take place, it is essential that the benefits of the action are larger than the costs that they would incur.

Olson also clearly explained why collective action is difficult to achieve in larger groups compared to smaller groups and taking this example into consideration, I will talk about how the collective action problem arises for policy makers willing to reduce carbon dioxide emissions. There are several reasons why large groups are not effective in taking a mutual decision that is in the interest of the group. First and foremost, the most important factor being that since it is such a large group, the individual benefit that any person would get is less than compared to a group that would be smaller. Therefore, due to this reason, the probability that a member would be willing to take action and actually pay most of the cost is very low. Also, a large group, let’s say for example the members of the Paris Climate Change Protocol that are looking to reduce carbon dioxide emissions and reduce the global warming effect would have to spend a lot to hold meetings because members of countries all over the world are coming together and therefore, in such scenarios, the high costs could create an obstacle to the path of the collective action decision.

Carbon dioxide emissions now a days have reached new heights. The amount of pollution generated has massively increased and this is the reason the greenhouse effect and climate change are taking place. Since this is such an important topic up for discussion, world leaders hold summits in order to address the climate change and come to a conclusion to determine how it should be solved. However, the main issue arises due to the fact that there is no single solution to this problem and that no single nation can come to a conclusion on how to deal with it. The fact that so many world leaders have their say in this means people have contrasting views and that leads to conflicts arising. In his theory of Collective Action, Olson pointed to a commonly held belief: “assuming that there are rational, self-interested actors, everyone in a group with a common interest will act collectively to achieve that common interest”. However, as also stated by Olson, this is not what actually happens. Rational actors will not act collectively to achieve an objective that they seek to even though if everyone has the same goal. This happens even if all the parties involved come to a conclusion on what the best way to deal with the issue is. Olson argued that “unless the number of individuals in a group is quite small, or unless there is coercion or some other special device to make individuals act in their common interest, rational, self-interested individuals will not act to achieve their common interests”.

Talking about collective action and climate change, the main issue arises because people want to free-ride. Even if there is a common interest by a group trying to achieve a mutual goal, very rarely would the involved parties want to pay for that. This is due to the nature of public goods being available regardless of whether or not one contributes. Every member would want others to pay the costs and then free-ride on the benefits received from the action. The best possible way to overcome the climate change issue is to go over what the best possible strategy should be. Countries can come together and come to a common conclusion on how to reduce pollution and what would be the best way to pay for these actions. However, as mentioned earlier, that one specific country cannot really take the main decision since it involves a lot of costs and no country is willing to bear a large amount of costs and receive a small amount of benefit. Looking into past history, it is very much evident that Olson’s theory of collective action fits in perfectly with the discussion above that one country has never received a benefit from paying most of the costs associated with helping climate change. Every country would feel as to why should they be the only ones to bear the cost and why every other country would then end up free-riding or not contributing equally. In this scenario, what countries tend to do is be reluctant to change anything and hope that others would bear the costs and then just gain the benefit of free-riding. Therefore, in turn, nothing really happens and we are stuck in the same scenario, hoping to reduce carbon dioxide emissions but not taking any action.

Scientists have long predicted that greenhouse gases are the main reason the planet is warming up. There have been quite a lot of theories that say otherwise and hence this disagreement on the topic is one of the reasons no significant action has taken place. There isn’t even been a general agreement by the government of various countries concerning climate change. Donald Trump, the current US President opted out of the Paris Agreement on climate change mitigation and he said he does not believe in global warming and climate change. If the leaders themselves do not agree on the subject, how can the policy makers come together and come to a conclusive decision on the topic? Unless and until, the world leaders decide whether this issue is a really serious one, no one will be willing to take any action and bear the high costs. However, on the other hand, an important fact is that all the other countries that are part of the Paris treaty agreed that climate change is a massive problem that should be dealt with but the issue arises since it is difficult allocating appropriate resources, responsibilities and cost and more importantly, who is going to be the front-runner and take the initiative so that we can see change?

A lot of developed countries including the US and Australia feel that the consequences of climate change and carbon dioxide emissions haven’t yet reached heights that the world should be worried about and that is not really worth paying the costs, at least in the near future. Even though the reduction of carbon dioxide emissions is an important issue, the benefits will not take effect immediately. Further analysis needs to be done such as calculating the cost-benefit ratio before a final decision is made. Here again, Olson’s theory of collective action can be observed because most governments and policy makers do not want sacrifice resources and time in order to reduce carbon dioxide emissions and greenhouse gases. As pointed out by Olson’s theory, “for large groups”, if the costs of the action are high, collective action is not likely; the larger the contribution that each member of the group must provide to achieve the collective good, the less likelihood there is for collective action”. Global warming today has reached new heights and a large reason is the emission of greenhouse gases such as carbon dioxide, methane and so on. The melting of glaciers, heatwaves in a lot of countries, and such similar instances have alerted world leaders that action needs to be taken immediately in order to save our planet. In such a scenario, world leaders saying that it does not make sense to pay the costs to help improve our planet in the near future is quite baffling and astonishing. A lot of predictions by forecasters show that the Earth may not exist at all over the next 100 years largely due to the rapid rate at which the ozone layer is being depleted and how global warming is rising. These predictions may or may not be accurate but what it does is send across an alarming message that if no action is taken, things are just going to get worse and could reach a level where taking any action might not do a lot.

According to the collective action theory presented by Olson, he specified that groups will be likely to take action if they are provided with incentives to do so. A lot of developing countries do not have the required and appropriate resources needed to bear the costs of these actions as their main goal first of all is to ensure that citizens in their country have access to basic education and health care. If they end up spending their budget on the citizens of their own country, they would not have anything remaining to contribute for the betterment of the planet. In such circumstances, rich countries need to step up to provide resources other than basic aid to the poorer countries in a bid to start saving our planet. An example of the world leaders coming together to address a pivotal issue was the Kyoto Protocol which was effective in 2005. The treaty was signed due to two important reasons: the first being that members recognized that global warming is occurring and secondly, the fact that we humans are largely responsible for it through greenhouse gas emissions, namely Carbon Dioxide. If this treaty is taken as an example and further initiatives to reduce carbon dioxide emissions can be effectively put in place, there is a great chance that it could work but it is important that a collective action decision needs to be taken and just as mentioned throughout, Olson’s theory of how large groups tend to be inefficient and lack coordination come into the bigger picture.

In continuation, scientists these days have indicated that there remains a great deal of difficulty regarding climate change policies compared to other environmental aspects, mainly due to the fact being that there remains a cloud of uncertainty with the associated costs and plan of action. There have been instances (such as the Paris Treaty) where world leaders have met to come to a conclusion but nothing significant has been seen. Here, again, we see how lack of coordination in big groups shows how the collective action theory can be applicable but is very limited. Olson’s mention of how large groups are unlikely to take action unless provided incentives is also very much evident in this scenario. Robert Keohane, an American academic mentioned that in the case of climate change, for a change to take place, there has to be an outright leader called a “hegemonic”. He also argued that countries having strong leaders need to put their foot down and take charge.

The United States, for example, produces almost a quarter of the world’s pollutants and greenhouse gases and hence, the participation of the US is very important in order for change to happen. However, as mentioned earlier, the current US president, Donald Trump, opted out of the Paris Climate Change protocol, stating that he does not believe in climate change and global warming, a quite astonishing assumption. Despite the fact that statistics show that his country produces almost a quarter of the world’s pollutants that contribute to global warming, it seems stupid when he says he does not believe in climate change and global warming. If the leader of the one of the most powerful economies of the world opts out of such an essential issue, how does one think that there is going to be any change that is going to occur? Based on current trends and facts, it is highly unlikely that at least until Trump is in office, there is no chance that the US is going to put their foot down and be the one who initiate policies to reduce carbon dioxide emissions and help curb the climate change dilemma. This just seems such a bad decision going forward since the situation is only going to get worse and the more the action is delayed, the more it is going to cost to reverse the course of action (in this scenario it is trying to reduce carbon dioxide emissions and reduce global warming).

To conclude, looking at it from global perspective, one can argue that the climate change dilemma has not been a complete failure since several attempts have been made to come close to a decision but we are very far away from being successful. There are so many new theories that have been published that argue otherwise but Olson’s Theory of Collective Action remains the most useful and complete theory in explaining how large groups tend to fail at achieving a common goal. It is important to note that Olson specifically stated that until and unless the impact of global warming and climate change reach worrying levels, there is a very low probability that there will be any action. Policy makers have been trying to reduce carbon dioxide emissions by placing bans and fines but that does not solve the major problem. The world leaders need to take up the initiative and come to a common conclusion to solve this major crisis but as of now, that seems a distant dream.

Scientists can have a large say in this matter. If they do further research and can provide concrete evidence that global warming is increasing at a very rapid rate and that temperatures are going to reach worrying levels in the coming few years, there is a high chance that it will create a lot of panic amongst everyone in the world but also possibly encourage world leaders to view this issue differently and hopefully act on it. They can act cooperatively with the government of their own country trying to explain them how and why this is a major cause of concern and show them their findings as well. They could try to link up with non-governmental organizations (NGOs) to raise greater awareness to the public and the policy makers and inform them that how sitting back and not acting upon this issue is not helping our planet. However, it is vital to know that all this would require a lot of coordination and planning as well as involve a lot of costs that countries would need to be ready to pay. Just as talked about throughout this paper, coordination in large groups is not a straightforward task and it is highly likely that Olson’s theory will again be prevalent here in that without any proper incentive provided, no one will be really willing to organize all this just so that a key message can be passed on to the government and leaders of every country that we need to reduce carbon dioxide emission and counteract global warming.

All in all, taking into consideration all of the above mentioned arguments, Olson’s theory seems just right. As of now, climate change is not something that is going to be acted upon and we humans should be responsible to bear the consequences that it brings to our planet.