What are some factors that make addressing climate change difficult?
In order to most efficiently address climate change, multiple large governments should work together, but different views regarding the amount and methods of abatement to make prevent that from occurring. People also tend to have differing views about their role in climate change, an example being how Democrats are more likely to believe global warming is occurring and is a result of human activity compared to Republicans. Businesses that profit from using or producing fossil fuels may also try to dissuade the public against abatement policies.

How can different governments work together to reduce negative environmental impact?
In situations where players repeatedly interact and can punish those who fail to contribute to the public goal, a socially optimal situation can be achieved. In a scenario where two countries can either restrict emissions or continue how they normally would, where continuing would result in a dominant strategy equilibrium, emission restrictions is possible if citizens of both countries care for the wellbeing of each other and are willing to implement costly measures if the other country also does so.

How do future generations change the dynamics of climate change?
The effects of climate change today will also go on to affect future generations; however, unlike us right now, future generations do not have the ability to represent themselves and vote on policy, meaning their well-being is reliant on the consideration of current generations.

What factors make people devalue abatement policies?
One of the biggest conflicts with deciding on abatement policies is the tradeoff between cost and benefit; we will know and pay for the cost, but the benefit is unknown and won’t be enjoyed by us. Future generations may have fewer needs and more goods than us, so it might be unfair for us to consider the benefits they will experience as much as we value the cost we’d have to invest. Extinction could also be possible, making investments in abatement worthless.

What did Nicholas Stern propose about climate change and future generations?
Stern believed in policies that implement abatement investments today for the sake of the future environment. To come to this conclusion, he applied a discount rate of 1.3% and a further 0.1% to account for a richer future generation.

What are some other perspectives outside of Stern’s?
William Nordhaus felt that Stern’s discount rate was too low and came up with a 4.3% rate instead. With his rates, a $100 benefit 100 years from now would only cost $1.48 today whereas a $100 benefit 100 years from now would cost $24.90 according to Stern. Nordhaus’ rate would mean a policy to save $100 would only be passed if it costs less than $1.48; Stern’s rate would mean it would only be passed if costs were below $24.90.

How do these conclusions differ?
Nordhaus’ discount rate was so much higher than Stern's since he considered impatience in his calculations. While Stern’s discount will consider all generations equally worthy of concern, Nordhaus’ discount places more emphasis on current generations’ views.

Tragedy of the commons: self-interested entities independently deplete a common resource

Dominant strategy equilibrium: every person plays their dominant strategy, acting purely in their self-interest

Discounting future generation’s cost and benefits: measures the current value of costs and benefits experienced by people of the future

Discount: measures impatience/ how much someone values additional unit of consumption now vs later

Pure impatience: valuing consumption now due to placing less value on future consumption

Addressing climate change is difficult due to several factors. One major challenge is the differing views among large governments regarding the extent and methods of abatement. This hinders efficient collaboration among nations. Additionally, public opinion varies, with Democrats more likely to believe in human-induced global warming compared to Republicans. This divergence in perspectives further complicates collective action. Moreover, businesses that profit from fossil fuels may attempt to discourage abatement policies, creating additional barriers.To reduce negative environmental impact, different governments can collaborate by engaging in repeated interactions and establishing mechanisms to punish non-contributors. This encourages countries to adopt emission restrictions, leading to socially optimal outcomes. Cooperation becomes possible when both countries prioritize the well-being of each other's citizens and are willing to undertake costly measures if the other country does the same. Future generations significantly influence the dynamics of climate change. While the effects of climate change today impact future generations, the latter lack representation and voting power to influence policies directly. Therefore, the well-being of future generations depends on the consideration and actions of present generations. Several factors contribute to the devaluation of abatement policies. The cost-benefit tradeoff is a major conflict, as the costs are known and borne by the present generation, while the benefits are uncertain and will primarily be enjoyed by future generations. Additionally, the potential extinction of humanity casts doubt on the value of investing in abatement measures. Nicholas Stern proposed implementing abatement investments today for the benefit of future generations. He applied a discount rate of 1.3% and an additional 0.1% to account for a wealthier future generation. Another perspective, presented by William Nordhaus, differs from Stern's approach. Nordhaus argued that Stern's discount rate was too low and suggested a rate of 4.3%. This higher rate reflects impatience in decision-making. Under Nordhaus's rates, a $100 benefit 100 years from now would only cost $1.48 today, whereas Stern's rate would price it at $24.90. Nordhaus's approach places more emphasis on the views and concerns of the current generation.

An example of how different perspectives impact how we address climate change would be how people approach sustainability; while some opt for recyclable or zero-waste goods, others participant in rampant consumerism with little concern for its impact.