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Climate policies under wealth inequality.

Vítor V Vasconcelos1, Francisco C Santos, Jorge M Pacheco

  • 1Applications of Theoretical Physics Group, Centro de Matemática e Aplicações Fundamentais, Instituto para a Investigação Interdisciplinar, P-1649-003 Lisbon Codex, Portugal.

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Wealth inequality can surprisingly boost global cooperation on climate change, with the rich often compensating for the poor. However, social homophily can undermine cooperation, especially among the poor.

Keywords:
collective actionenvironmental agreementsevolutionary game theoryglobal warminggovernance of the commons

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Area of Science:

  • Environmental science
  • Behavioral economics
  • Game theory

Background:

  • International climate negotiations often fail due to policy conflicts between wealthy and developing nations.
  • Addressing climate change requires global cooperation on mitigation measures.

Purpose of the Study:

  • To model the impact of wealth inequality on cooperation in climate change mitigation.
  • To analyze the behavioral dynamics between rich and poor populations regarding cooperation.
  • To investigate the role of homophily in cooperation.

Main Methods:

  • Implementation of wealth inequality in a threshold public goods dilemma model.
  • Simulation of an asymmetric population of rich and poor players.
  • Inclusion of variable homophily to limit social influence.

Main Results:

  • Wealth inequality, without homophily, enhances global cooperation compared to scenarios without inequality.
  • Richer individuals generally contribute more and compensate for lower contributions from poorer individuals.
  • Poor individuals' contributions are highly sensitive to homophily, potentially causing cooperation collapse.

Conclusions:

  • Wealth inequality can be a driver for increased global cooperation on climate action.
  • Homophily poses a significant risk to cooperation, particularly for poorer populations.
  • Targeted interventions may be needed to mitigate homophily's negative effects and ensure contributions from all groups.