Heterogeneity and global climate action

Responses to climate change differ between countries yet the impact of these differences on the evolution of global climate action has not been analysed to date.

This paper addresses two related questions: (i) what is the role of the variation of preferences in the global political economy of climate action; and (ii) what are the necessary conditions for sustained high levels of global action?

The authors develop a model to assess countries’ choices at different times to either take action to reduce emissions or not. They find that countries’ choices are influenced by their current level of emissions, total participation in climate action, and other idiosyncratic factors. The heterogeneity between countries is caused by income inequality, differing vulnerability to climate damage, and other political economy factors.

The model’s key result is that sustained high levels of global action are achieved only if there is a low degree of heterogeneity in countries’ preferences for action and a strong peer pressure effect to act.

Key points for decision-makers

• The authors have developed an empirically driven evolutionary model in which countries decide whether or not to take action on climate change. In the model, agents’ preferences are shaped by three components: social, private and idiosyncratic utility.
• Overall, the heterogeneity of climate action preferences is shaped by global inequalities, as economic disparities, institutional differences and climate vulnerability influence how countries prioritise mitigation efforts. This is crucial for understanding the range of possible outcomes in global climate action and emissions dynamics, and shows the importance of addressing global inequalities to achieve environmental goals.
• When the degree of heterogeneity is high, more countries with strong preferences against taking action are likely to abstain from doing so as net emissions approach zero, compared with when heterogeneity is low. This decline in participation weakens peer pressure gradually, rather than immediately reducing emissions, and leads to even more countries abstaining. Before net emissions increase enough to reverse this trend, peer pressure shifts towards further abstention from action, creating a self-reinforcing cycle.
• The expected outcome is one where participation in climate action stops increasing, and global net emissions remain positive.
• While the model effectively reproduces the observed increase in participation in climate action over the last few decades, it predicts a decline in action in the coming years.
• To achieve high levels of global participation in emissions reduction efforts, two key conditions must be met: relatively low heterogeneity among countries and strong peer pressure. The analysis demonstrates that these conditions are both necessary and sufficient to counteract the average negative idiosyncratic factors that act as barriers to climate action across countries.