Climate extreme events and climate change are enforced by extortionate freeriders overloading those who mitigate – An economic experiment

Abstract:

Climate extremes have become more frequent and severe due to excessive human emissions, yet it remains unclear whether the threat of costly hazards spurs collective mitigation. In a laboratory experiment, groups of six players contributed individually toward a collective target that, if unmet, triggered a simulated climate catastrophe and forfeiture of their endowment. Some groups also faced intermediate climate events, avoidable through sufficient mitigation to prevent costly losses. Although many groups suffered from losses, they reached the final target as often as the control groups without simulated climate events. Player behavior had two variants: “fair players”, who consistently contributed their share, and “extortioners”, who free-rode and forced others to compensate for their lack of contribution. Groups were randomly composed of participants, whose observed behavior revealed between 0 and 5 individuals acting as extortioners. When extortion became overwhelming, fair players failed to absorb the deficit, groups missed the target and steadfast extortioners incurred losses too. Extortioners disregarded losses and accumulated a large gain while fair players earned little. Nonetheless, fair players' best response was to accede to extortion and cover the deficit. Extortion decreased mitigation across all conditions. Our findings may help to illustrate mechanisms also relevant in the real world where individual actions e.g., leisure travel on giant cruise ships or running power plants with coal, and much else, ultimately prevent collective success. In 2024, global CO2 emissions and temperatures reached record highs, stressing the inability of fair players to compensate the deficit caused by freeriders. This dynamic suggests that the persistence of climate change stems from the unwavering behavior of extortioners in contexts outside of the laboratory.