“We have to recognize that international approaches to climate change have basically failed. They are not going anywhere, maybe even backwards,” said economist William Nordhaus at a lecture for IIASA staff and young scientists on 23 June. The reason for this failure, he argued, is that international agreements have so far failed to deal with the problem of free riders.
The Kyoto Protocol, for instance, failed as countries dropped out one by one, as soon as mitigation started to become costly. Many countries never even ratified the agreement. Nordhaus explained, “There were no penalties for dropping out.”
Norhaus first introduced the concept of climate clubs at the IIASA 40th Anniversary Conference in 2012.
As the next round of climate talks approach this winter and next in Paris, many researchers say it is time for a new model for international climate change treaties. One new idea, which Nordhaus first proposed at the IIASA 40th Anniversary Conference in 2012, is the concept of “climate clubs.”
Nordhaus said, “Think of the treaty as a club. It’s a voluntary agreement, where members get certain benefits, for a certain cost.” A climate club would work like a free-trade union, such as the EU. It would encourage participation by penalizing non-participants, allowing members of the “climate club” to charge tariffs on all imports of non-participating nations. In his lecture on Monday, Nordhaus expanded on the concept he introduced in 2012, presenting the results of modeling work to determine the tariff rates and carbon prices that would be needed in such an agreement, and how participation would look.
Nordhaus found that more countries were likely to participate when carbon prices were lower. At a carbon price of 25 or 50 dollars, a majority of world regions would participate in the club, while at higher carbon prices of 75 to 100 dollars per ton of carbon dioxide, the highest participation rate would be only about half of that.
At IIASA on Monday. From left: William Nordhaus, IIASA Deputy Director General Nebojsa Nakicenovic, and IIASA Risk Policy and Vulnerability Program Director Joanne Bayer
The high carbon price, Nordhaus explained, would make the cost of participating much higher than the costs of tariffs for non-participants. However, with a lower carbon price, even low penalty tariffs of 3 to 4% could be enough to encourage participation. The idea of tariffs is simpler than previous suggestions of trade penalties based on the carbon emissions impact of specific goods—which in practice are difficult to define, and, as Nordhaus said, “not a big enough stick to induce participation.”
Like any trade agreement, though, Nordhaus’ climate club also means some win and some lose. When he examines the benefits on a regional level, the US, EU, and India appear to gain the most benefits, while Russia and China gain the least. What would it take to get such an agreement off the ground? Nordhaus said that a few key regions would be enough—for example, the EU, the USA, and China.
Watch Nordhaus’ 2012 Lecture at the IIASA Conference
William Nordhaus is Sterling Professor of Economics at Yale University, New Haven, Connecticut, USA. He has a B.A. from Yale University (1963) and a Ph.D. in Economics from MIT (1967). More>>
On October 15, 2012, a young man from Bangladesh named Quazi Mohammad Rezwanul Ahsan Nafis parked next to New York Federal Reserve Bank in a van with what he believed was a 1000-pound bomb, walked a few blocks away, and then attempted to detonate the bomb by mobile phone.
In fact, the bomb was a fake, supplied by undercover agents for the United States FBI. The agents, posing as radical jihadists, had led Nafis along for months, allowing him to believe they were fellow terrorists and gathering information about his plot. The cover was maintained until the moment when his bomb failed to detonate, and Nafis was arrested. Disaster averted.
Researchers at IIASA study many risks to society, from floods, hurricanes, and natural disasters, to the impacts of climate change on future generations. They use models that can help disentangle the costs and benefits of different policies that could help prevent damage or deaths, or mitigate the impacts of global problems like climate change and air pollution. Could the same techniques apply to the dangers of terrorism and jihadists attacks? Could systems analysis help inform intelligence agencies in order to stop more terrorist attacks?
Could systems analysis techniques help guide policies to prevent terrorist attacks? Image Credit: Vjeran Pavic
Yale University Professor Ed Kaplan has done just that in work that he presented at IIASA in late December 2013. His research, which has intersected with IIASA in the past through collaborations with former IIASA Directors Howard Raiffa and Detlof von Winterfeldt, uses operations research to find ways to improve intelligence operations so as to catch more terrorists, before an attack can take place.
Kaplan, an expert on counterterrorism research, refined a simple economic model of customer service, known as a “queuing model” to instead represent the evolution of terror plots by terrorists, and interaction between the terrorists and the undercover agents who are working to uncover those plots.
“The best way to stop an attack is to know it’s about to happen beforehand,” says Kaplan. That means, in large part, having enough agents in the right places to detect attacks. But how many agents is the right number?
At IIASA, Kaplan described his terrorist “queuing model,” which can be applied to show how much a given number of agents would be likely to decrease attacks. Queuing models are an operations research method used to understand waiting times in lines, such as what happens at restaurants, offices, telephone queues or even internet servers.
But in the standard model, customers want to be served, and the servers know who the customers are. In Kaplan’s terrorist model, the terrorists – customers –don’t want to be served, and the servers—the agents—don’t know where their customers are. By modifying the model to account for those differences, Kaplan can answer some tricky questions about the best way for intelligence agencies to fight terrorism.
“Even if you don’t know how many terrorists there are or where they are, you can make it more likely that they will show themselves, you can make it more difficult for them to carry out an attack,” says Kaplan.
Kaplan’s method provides estimates of the numbers of undetected terrorist plots, as well as what it would take to increase detection rates.
Using data from court records of terrorism cases, Kaplan refined his models to include the average time that a terror plot is active – that is, the time from when a terrorist group first starts a plot, to the time that they are either caught, or the attack takes place. Based on the data, he could then calculate how many terror plots were likely to be in progress at any one time. He could also estimate the probability of detecting those plots, and how much that probability could be increased by employing more agents. For example, the model calculates that by increasing FBI agents by a factor of two would increase the detection rate from 80% to 89%.
But the data also point to one disturbing conclusion: A 100% detection rate is impossible. As the number of agents increases, the detection rate increases in ever smaller increments. Kaplan says, “We have to decide how safe is safe enough. When should we stop putting money into Homeland Security, and start putting more back into education and health?”
Note: This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.
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