Gains from climate negotiations (and their problems)

One of the problems with climate negotiations is that there are potential benefits at stake, but none of them are the right kind at the right scale. Without benefits to negotiate over, you are not playing a positive-sum game; you're playing a zero-sum game (worse, it might even be a negative-sum game, depending on how you frame it). Psychologically, humans would often rather take stupid risks than incur a certain loss, so zero-sum or negative-sum negotiations are poison. To my mind, the potential benefits on the table with climate change subdivide into three categories, and none of them have the right configuration to drive significant compromise:

1) Large, certain, public goods. The gains of averting climate change are large and relatively certain: while we can't estimate their precise size very well, there is wide agreement that they are real, and many believe that they would be significant if they could be achieved. However, they are also public goods, meaning they cannot be divided up as private incentives, and they are vulnerable to free-riding. These won't drive compromise, at least not until the losses that are the alternative to a deal start to become tangible and large. That would probably be too late. The problem with this class of gains is the type of good: the fact that it's public.

2) Small, certain, private goods. Some gains that could result from a global deal are better-suited to negotiation in that they are private goods. These are gains such as access to carbon markets or the fruits of research, and receipt of negotiated side payments for actions - that is, things like sums paid to developing countries through the Clean Development Mechanism to help them defray the costs of low-carbon projects. These are also certain and predictable: countries can negotiate them with confidence because they are under the control of the parties involved. However, they are just too small in practice. The sums involved in these types of gains are overwhelmed by the likely costs of climate mitigation action, at least in the near future. Therefore, they won't drive compromise either. The problem with this class of gains is size.

3) Large, private, and uncertain goods. This category consists of the types of stuff people mean when they talk about "green growth". The emerging consensus is that the industrial and economic growth in green business could be large. And those gains would or could be private. But they are highly uncertain: no one really knows what the green economy will look like or precisely where the money and enduring jobs will be. These types of gains can't drive compromise because people don't know how much they should compromise for them or what types of compromises they should and shouldn't make. They don't know enough about the future of green business to negotiate over the rules for it. The problem with this class of gains is uncertainty.