Download (AGE). OPIM 319, Spring 2010 - Operations, Information and

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Advanced Decision Systems: Agents, Games,
and Evolution (AGE). OPIM 319, Spring 2010
Steven O. Kimbrough
Operations and Information Management
University of Pennsylvania
3:00-4:20, Tuesdays and Thursdays, JMHH F94
2010-04-06. Class 22.
CPRs: Common-pool Resources
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Outline
1
Setup
2
Marisa
3
Alex Science
Introduction
Climate Change Science
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Alex CPR
CPRs: Common-Pool Resources
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End Matter
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Climate Change Mitigation
We will engage in a “rôle play”, a realistic but fictitious case,
similar in some ways to those used in negotiations classes.
The name of this rôle play is “Climate Change Mitigation.”
We are to play employees of a large, international
consulting firm, Wharton’s Global Analytics (WGA, not to
be confused with the organization whose URL is
http://www.global-analytics.com/).
Your instructor will play the part of Marisa Kaplan, Senior
Partner of Wharton Global Analytics, and Director of the
Strategic Analytics Division. Also he will play the part of
Alex Chavez, Chief Scientist at Wharton Global Analytics.
Students in the course will play the parts of analysts in
WGA’s Strategic Analytics Division.
Marisa will now explain things to you. Feel free to ask
questions.
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The Gig
Greetings colleagues. I have asked you to assemble here
because we have rather urgently been tasked with an important
project.
WGA has been retained by the United Nations, specifically by
the Secretary General, to help plan for an upcoming effort to
strike a global deal to mitigate and adapt to climate change.
You may read a concise history of the UN’s efforts on climate
change at http://en.wikipedia.org/wiki/United_
Nations_Framework_Convention_on_Climate_Change.
This history includes the December 2009 meeting in
Copenhagen, which was widely reported in the press to be a
failure. (Whether that is accurate is another question.)
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The main tasks
At the heart of all efforts to mitigate and/or manage climate
change is the issue of controlling the release of “greenhouse
gases” (GHGs) into the earth’s atmosphere.
Principal among the anthropogenic (human-caused) sources are
CO2 (carbon dioxide), which is principally sourced by burning
fossil fuels, N2 O (nitrous oxide), and CH4 (methane), which
comes from a variety of sources, including cattle.
Because production of these gases is often beneficial to
individuals in the short term (e.g., burning oil for transportation
and heating, burning coal for generating electricity), yet
seemingly disastrous for humankind in the long term, the
Secretary General sees the situation, as do many others, as a
social dilemma, one that may have profoundly tragic
consequences.
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The main tasks
The Secretary sees the problem as having scientific, economic,
and broadly political aspects.
Our task is to prepare ideas and assessments on the broadly
political side.
The situation has the makings of a “tragedy of the commons”
with potentially dire consequences.
Our job is to identify opportunities and roadblocks for a global
agreement to mitigate and manage climate change.
What are the possibilities for a grand deal to solve this problem?
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Procedures
I am assigning each of you to cover one of 8 regions of the world.
If you feel you have special interest or expertise in some other
region and can find someone to trade with, you may do so.
I am requesting a short report (2 pages) from each of you on
your assigned (or acquired) regions. This report is due by 9
p.m. on Friday, April 16.
Your reports should aim at identifying the main interests and
policy goals that your areas will seek to further, in the context of
climate change mitigation and adaptation (or management).
These goals, of course, need not be directly related to climate
change. For example, developing countries may want
development aid, developed countries may seek access to
markets. On this, keep in mind BATNAs and reservation levels
and try to assess them. Also, internal divisions, ideologies, and
political commitments that may affect bargaining.
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Procedures (con’t.)
The Secretary’s ultimate goal is to devise rules and
institutions that will be accepted and honored, and can be
monitored. These rules and institutions should lead to a
sustainable existence for humankind on the earth.
I will promptly review your work products and provide
feedback to you on April 17. On April 22 we will meet as a
group to discuss and further formulate our findings.
In preparation for our April 22 meeting, individuals covering
a common region should meet and assemble a brief
presentation (with slides) of no more than 6 minutes. In
doing this you should pool your findings. In developing
your original 2-page reports, you may agree to focus on
different areas or topics (or not). In any case, the 2-page
reports should be your own work.
Level of effort. 2 pages, some reading, plus about 4 hours.
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Further considerations
In a nutshell, the basic problem is release to the
atmosphere of greenhouse gases.
Two approaches
Mitigation: act to reduce or reverse causes of climate
change
Adaptation: act to reduce the negative consequences of
climate change
Expectation: We’ll have to do both. What mix? Who and
what?
Our task is to advise the Secretary General, by
determining interests and requirements for the several
regions, and then to find potential institutional designs
(rules of behavior) that will be feasible and lead to
sustainable existence.
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Further considerations
The subject of climate change is contentious and has been
heavily politicized. It is imperative that we avoid becoming
participants in the circus. Stick to the facts as
well-established. This is a UN operation.
Your work on this project needs to meet the highest levels
of professionalism.
In assessing a region, you are not to advocate either for or
against it. Rather, your job is to identify the key issues,
interests, constraints associated with the region, with
regard to climate change policy.
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Further considerations
I will next turn you over to Alex Chavez, our chief scientific
advisor.
Alex will discuss with you (i) the science behind climate
change and (ii) the theoretical concept of common-pool
resources.
On the science side, the Secretary General wishes to
abide by the consensus of the best available science,
recognizing at the same time that it is inevitably imperfect.
OGIT concept.
Are there any questions before I turn things over to Alex?
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Introduction
Two topics in what follows
Climate change science, as you will have access to it.
Common-pool resource situations, and their relevance to
climate change.
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Climate Change Science
Science Sources
Authoritative source of factual information: The IPCC, The
Intergovernmental Panel on Climate Change,
http://www.ipcc.ch/index.htm. (But there have
been mistakes.)
The IPCC, consisting of thousands of scientists, has
assembled four “assessment reports” on climate change,
summarizing what is known and what the certainty of it is.
A fifth assessment report is underway. Very confidentially,
it seems that established trends will be confirmed at the
high end of previously-estimated danger and costs.
In our work we shall have to use results from AR4, the
fourth assessment report.
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Climate Change Science
Science Sources: IPPC’s AR4
From the IPPC homepage
http://www.ipcc.ch/index.htm:
“The Fourth Assessment Report (AR4) was released in
2007, and it consists of four volumes: the three IPCC
Working Groups (WGs) Reports and a Synthesis Report
(SYR)..."
The 4 reports are:
1
2
3
4
Climate Change 2007: Synthesis Report
WG1: The Physical Science Basis
WG II: Impacts, Adaptation and Vulnerability
WG III: Mitigation of Climate Change
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Climate Change Science
IPPC’s AR4
Our time (to make recommendations) is short. We are mainly
interested in two SPMs (summaries for policymakers”):
1
Climate Change 2007: Synthesis Report
http://www.ipcc.ch/publications_and_data/
publications_ipcc_fourth_assessment_report_
synthesis_report.htm
For our purposes, the SPM is key. It is available in PDF.
http://www.ipcc.ch/pdf/assessment-report/
ar4/syr/ar4_syr_spm.pdf.
File: ar4_syr_spm.pdf on webCafé, ClimateChange folder.
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Climate Change Science
IPPC’s AR4
2
Contribution of Working Group III to the Fourth
Assessment Report of the Intergovernmental Panel on
Climate Change, 2007
http://www.ipcc.ch/publications_and_data/
ar4/wg3/en/contents.html
For our purposes the SPM is key. It is available in PDF.
http://www.ipcc.ch/pdf/assessment-report/
ar4/wg3/ar4-wg3-spm.pdf
File: ar4-wg3-spm.pdf on webCafé, ClimateChange folder.
Each of the two documents is about 20 pages long.
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Climate Change Science
IPCC
Authoritative science.
Findings are by consensus, based on reviews of
peer-reviewed scientific literature.
Findings come with estimates of agreement and level of
evidence.
There have been, inevitably, some errors, but this is the
best we have and we have to use it.
On the whole, we can expect that IPCC findings constitute
authoritative science for present purposes.
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Climate Change Science
Videos
Good on how environment science is done today. TED:
Rachel Pike: http:
//www.ted.com/talks/lang/eng/rachel_pike_
the_science_behind_a_climate_headline.html
(4:11)
IPCC AR4 summary. UN Climate Change - IPCC Dr.
Pachauri
http://www.youtube.com/watch?v=9kSVNYEwkyk.
(7+ minutes)
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Climate Change Science
Findings not indispute
Concentrations of the greenhouse gases carbon
dioxide, methane, ozone, and nitrous oxide are
increasing owning to fossil-fuel consumption and
biomass burning. Carbon dioxide has increased from
its pre-industrial level of about 280 parts per million
(ppmv) to about 380 ppmv today, an increase of about
35 percent. From ice-core records, it is evident that
present levels of CO2 exceed those experienced by
the planet at any time over at least the past 650,000
years. [Emanuel, 2007, pages 60–1]
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Climate Change Science
Findings not in dispute
Concentrations of certain anthropogenic aerosols
have also increased owing to industrial activity.
The earth’s average surface temperature has
increased by about 1.2◦ F in the past century, with
most of the increase occurring from about 1920 to
1950, and again beginning around 1975. The years
1998 and 2005 were the warmest in the instrumental
record.
[Emanuel, 2007, page 61]
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Climate Change Science
Findings not in dispute
Sea level has risen by about 2.7 inches over the part
40 years; of this, a little over an inch occurred during
the past decade.
The annual mean geographical extent of arctic sea ice
has decreased by 15 to 20 percent since satellite
measurements of this began in 1978.
[Emanuel, 2007, page 61]
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Climate Change Science
Findings with a preponderance of agreement
The global mean temperature is now greater than at
any other time in at least the past 500 to 1,000 years.
Most of the global mean temperature variability is
caused by four factors: variability of solar output,
major volcanic eruptions, and anthropogenic sulfate
aerosols and greenhouse gases.
[Emanuel, 2007, page 62]
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Climate Change Science
Findings with a preponderance of agreement
The dramatic rise in global mean temperature in the
past 30 years is owing primarily to increasing
greenhouse-gas concentrations and a leveling off or
slight decline in sulfate aerosols.
Unless measures are taken to reduce greenhouse-gas
production, global mean temperature will continue to
increase, about 2.5 to 9◦ F over the next century,
depending on uncertainties and how much
greenhouse gas is produced.
[Emanuel, 2007, pages 62–3]
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Climate Change Science
Findings with a preponderance of agreement
As a result of the thermal expansion of sea water and
the melting of polar ice caps, sea level will increase six
to 16 inches over the next century, though the
increase could be larger if large continental ice sheets
become unstable.
Rainfall will continue to become concentrated in
increasingly heavy but less frequent events.
[Emanuel, 2007, pages 62–3]
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Climate Change Science
Findings with a preponderance of agreement
The incidence,intensity, and duration of both floods
and drought will increase.
The intensity of hurricanes will continue to increase,
though their frequency may dwindle.
[Emanuel, 2007, page 63]
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Climate Change Science
Questions?
Before proceeding to CPR problems, are there any
questions or comments on the science side?
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CPRs: Common-Pool Resources
Concept
(This is science, too, social science.)
Excellent source materials: [Ostrom, 1990] and
[Ostrom et al., 1994]. (Recent Nobel prize in economics.)
Chapters 1 and 2 of [Ostrom et al., 1994] are posted on
webCafé.
A CPR is a good characterized by two properties:
1
2
High subtractability
Low excludability
Examples of CPR situations: fisheries, water use.
The atmosphere is a CPR with respect to release of
GHGs. What is used up is the capacity to accept without
damage GHGs.
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CPRs: Common-Pool Resources
Classical Theory
Very pessimistic
1
2
3
Hobbs
Leviathon or “the war of all against all”
Prisoner’s Dilemma
depletion of the resource
Olson, logic of collective choice
depletion of the resource
Note: this is not iterated play by 2 players, but by N players,
with N very large.
Depletion of the resource wrt climate change would likely
eventually make earth uninhabitable by humans.
At the very least: terrible economic consequences and loss
of life.
Classical solutions
1
2
Privatize the commons
Leviathon
Neither is feasible wrt climate change. (Or is it?)
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CPRs: Common-Pool Resources
Enter Ostrom et al.
In fact, some CPRs are managed stably for extended
periods, decades even centuries.
Meadows and forests in Switzerland, Japan (centuries)
Irrigation systems in Spain (centuries)
Some fisheries
Et cetera
The CPRs are not depleted, but are stable. Why? How?
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CPRs: Common-Pool Resources
Key graph [Ostrom et al., 1994, page 5]
In Governing the Commons, however, it was shown
that in many instances individuals jointly using a CPR
communicate with one another and establish
agreed-upon rules and strategies that improve their
joint outcomes. By devising their own rules-in-use,
individuals using such CPRs have overcome the
“tragedy of the commons.” Further, where the
institutions they devise have been sustained over long
periods of time, it is possible to describe a series of
design principles that characterize the robust
institutions and to identify the variables most likely to
be associated with successful institutional change.
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CPRs: Common-Pool Resources
Institutional design
The CPRs are managed by institutions.
Roughly, characterize these as governing rules, which may
be enforced in various ways.
“Design principles illustrated by long-enduring CPR
institutions” [Ostrom, 1990, page 90]
Let’s discuss these in the context of climate change.
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CPRs: Common-Pool Resources
Design principles. . . [Ostrom, 1990, page 90]
1
Clearly defined boundaries
Individuals or households who have rights to withdraw
resource units from [pollute in] the CPR must be clearly
defined, as must the boundaries of the CPR itself.
2
Congruence between appropriation and provision rules
and local conditions
Appropriation rules restricting time, place, technology,
and/or quantity of resource units are related to local
conditions and to provision rules requiring labor, material,
and/or money.
3
Collective-choice arrangements
Most individuals affected by the operational rules can
participate in modifying the operational rules.
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CPRs: Common-Pool Resources
Design principles. . . [Ostrom, 1990, page 90]
4
Monitoring
Monitors, who actively audit CPR conditions and
appropriator behavior, are accountable to the appropriators
or are the appropriators.
5
Graduated sanctions
Appropriators who violate operational rules are likely to be
assess graduated sanctions (depending on the
seriousness and context of the offense) by other
appropriators, by officials accountable to these
appropriators, or by both.
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CPRs: Common-Pool Resources
Design principles. . . [Ostrom, 1990, page 90]
6
Conflict-resolution mechanisms
Appropriators and their officials have rapid access to
low-cost local arenas to resolve conflicts among
appropriators or between appropriators and officials.
7
Minimal recognition of rights to organize
The rights of appropriators to devise their own institutions
are not challenged by external governmental authorities.
8
For CPRs that are parts of larger systems: Nested
enterprises
Appropriation, provision, monitoring, enforcement, conflict
resolution, and governance activities are organized in
multiple layers of nested enterprises.
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CPRs: Common-Pool Resources
Conclusion
Are there any questions or comments?
Remember: This is a quick-drill. Budget about 4–6 hours
on this and do your best.
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Emanuel, K. (2007).
What We Know about Climate Change.
A Boston Review Book. The MIT Press, Cambridge, MA.
Ostrom, E. (1990).
Governing the Commons: The Evolution of Institutions for
Collective Action.
Cambridge University Press, Cambridge, UK.
Ostrom, E., Gardner, R., and Walker, J. (1994).
Rules, Games, & Common-Pool Resources.
University of Michigan Press, Ann Arbor, MI.
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$Id: class-22-AGE-CPR-beamer.tex 1485 2010-04-06 14:27:35Z sok
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