High-risk high-reward investments to mitigate climate change

Talbot M. Andrews (), Andrew W. Delton and Reuben Kline
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Talbot M. Andrews: Center for Behavioral Political Economy, Stony Brook University
Andrew W. Delton: Center for Behavioral Political Economy, Stony Brook University
Reuben Kline: Center for Behavioral Political Economy, Stony Brook University

Nature Climate Change, 2018, vol. 8, issue 10, 890-894

Abstract: Abstract Some technologies, such as solar or wind power, create certain but relatively small reductions in greenhouse gas emissions. Others, such as carbon sequestration devices, have larger potential upsides, but a greater possibility of failure. Here we show using economic games that people will invest in high-risk high-reward technologies when more certain options will not be sufficient. Groups of players had to contribute enough to avoid a simulated climate change disaster. Players could defect, make a certain contribution or make a risky contribution with a high potential gain. Across four studies using both laboratory (n = 296 and n = 297) and online (n = 501 and n = 499) samples, we found that more players made riskier contributions when necessary targets could not be met otherwise, regardless of the magnitude of potential losses. These results suggest that individuals are willing to invest in risky technology when it is necessary to mitigate climate change.

Date: 2018
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DOI: 10.1038/s41558-018-0266-y

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