## Animal kingdom and climate change — Agarwal

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**Canonical URL:** [Animal kingdom and climate change — Agarwal](https://www.imf.org/-/media/files/publications/fandd/article/2021/september/animal-kingdom-and-climate-change-agarwal.pdf)

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### Overview
- Humans share 98 percent of their genes with chimpanzees; Jared Diamond links the 2 percent genetic difference to both human success and potential for disaster.
- Frans De Waal coined “chimpanzee politics” to compare chimpanzee social maneuvering with human political behavior.
- The article argues that limits to human cooperation—exemplified by “chimpanzee politics”—impede global responses to climate change, pandemics, and nuclear threats.
- Better economic and financial institutions can help overcome cooperation limits and confront climate change.

### Correlated payoffs
- Cooperative behavior is favored by natural selection when survival benefits of actor and receiver are positively correlated.
- Two main mechanisms creating payoff correlation:
  - Kinship (partners share genes by common descent).
  - Reciprocity (current costs account for the expectation of future benefits).
- Evidence from animal societies:
  - Cooperation most frequently involves kin (example: two cheetah siblings forming hunting bonds).
  - Nonkin cooperate when immediate benefits exist (examples: two chimpanzees grooming each other; remoras hitching a ride on sea turtles).
  - Apparent altruism can reflect expectations of future reciprocal help (example: troop of baboons).
- Human cognitive evolution allows complex reciprocal exchanges across long time delays—termed “intertemporal trade” in economics.
- Four factors hindering human cooperation on climate change:
  - Presence of multiple nonkin actors across the globe.
  - Long time lags between cooperative acts, reducing perceived reciprocity.
  - Geographic inequality that lowers mutual benefits.
  - Evolutionary limits to imagination and understanding of diverse belief systems and the extent of the climate threat.

### Overcoming chimpanzee politics — role of institutions and markets
- Good economic institutions and well-designed markets can identify and maximize correlated payoffs and design mutual obligations to promote cooperation.
- Seven insights from evolutionary biology to inform economic and financial design (first four pertain to mitigation, next two to adaptation, last to monitoring):

  - Greater global integration of economic and financial markets will lead to greater cooperative action on climate change.
    - Among chimpanzees, social bonds predict cooperative resource sharing; humans show reduced risk of warfare with greater economic interdependence.
    - Montesquieu quote from 1748: “The natural effect of commerce is to bring peace. Two nations that negotiate between themselves become reciprocally dependent.”
    - Greater global trade integration can help avoid conflict and foster cooperation on climate change.

  - Smaller actors need to be held accountable and act on climate change.
    - Incentives to cheat are strong when punishment systems are weak.
    - International tools to ensure countries stick to climate pledges are few; suggested parallel solution: decentralize by encouraging subnational governments and corporations to make climate and environmental pledges.
    - Decentralization leverages accountability in smaller communities of stakeholders; many private companies have promised carbon-neutrality in response to customers, shareholders, and other stakeholders.

  - Give weight to future generations in every cost-benefit exercise.
    - Nonhuman animals discount future rewards much more than humans; humans who lack understanding also heavily discount the future.
    - Long lags between mitigation decisions and impacts reduce salience and hinder optimal investment.
    - Remedy: explicitly weight utility for future generations in cost-benefit analyses underpinning government, corporate, or private actions.
    - Several countries, such as Bhutan, already incorporate this approach.
    - Additional measures: encourage greater representation of younger people in political life and build policy institutions focusing on long-term issues like intergenerational inequality.

  - Innovation cooperation may be easier to achieve than cooperation on other climate-related issues.
    - COVID-19 showed global innovation can be scaled up rapidly; before COVID-19, the fastest vaccine development took four years (for mumps), yet by the end of 2020 several COVID-19 vaccines had proved highly effective.
    - Global cooperation to produce and distribute vaccines equitably has lagged.
    - Political difficulty exists in implementing higher carbon taxes despite persuasive cases.
    - Rapid technological advances driving down the cost of renewable energy explain much of the recent shift to renewables.
    - Policy implication: accelerate clean energy innovation to make climate-friendly choices easier for self-regarding actors by increasing private benefits of switching to cleaner energy.

  - A centralized global market to hedge climate risks is needed to maximize risk sharing and promote cross-country cooperation.
    - Food sharing among chimpanzees works when risk is idiosyncratic; insurance markets insuring idiosyncratic human risks (car accidents, health shocks, mortality) work well.
    - Correlated risks (property in danger from natural disasters) appear as “aggregate risk” and require a global market.
    - A successful market to share climate risks would benefit from a single global platform that brings together entities from different parts of the world experiencing impacts differently or at different times (in a less correlated way).

  - Action on climate risk sharing is needed now—before the uncertainty about cross-country distribution of climate change impact is resolved.
    - Vampire bats regurgitate blood to feed unrelated peers and keep track of who helped them; uncertainty about future hunger incentivizes sharing today.
    - Markets must act before cross-country impact uncertainty is resolved; once the risk materializes, the issue becomes burden sharing rather than risk sharing.
    - If it becomes clear that relatively poor countries (for example, those in the tropics) will suffer most, richer countries may have few incentives to enter risk-sharing agreements.

  - Invest in information and imagination.
    - Markets will not act to share risks if information about risks is limited.
    - Example: in India, a large proportion of the population lives where average annual pollution levels as measured by PM2.5—particles smaller than approximately 2.5 microns—are several times higher than the level considered safe by the World Health Organization, yet many are unaware due to too few continuous air monitoring stations.
    - Better understanding of socioeconomic feedback loops (for instance, potential impact of climate refugees coming to high-income countries) can reframe climate change as a global problem.
    - Greater environmental disclosures and imagination to study long-term feedback loops can make global climate change more compelling to key actors and spur action today.

- Final observation: imagination and the urge to connect with others may separate humans from other species and help drive cooperative solutions.

*Source: animal-kingdom-and-climate-change-agarwal*

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_Source: https://www.imf.org/-/media/files/publications/fandd/article/2021/september/animal-kingdom-and-climate-change-agarwal.pdf_