Professor of Natural Resource Economics, Columbia University
Year of birth: 1957
(Date of interview: July 2019)
It is a great pleasure for me to present Scott Barrett in the Meet Top Environmental Economists (#MeetTopEnvEcon) series. Scott is most well-known for his contributions towards cooperation in environmental economics, but stopping there would neglect all his contributions on infectious diseases, trade and the environment, development, or ecological economics. What is very interesting about Scott is that his research is always well-founded in real world problems. This down-to-earth approach finds considerable interest from the policy side and allowed him to be invited as an expert for institutions such as the World Health Organization, the IPCC, the World Bank or the Asian Development Bank. In his own worlds: My research shows whether and how, for the sake of humanity, international cooperation can “SAVE OUR PLANET.” I guess that says it all.
Here is an Express Views video summary from our interview. Enjoy.
And now let’s go to the actual interview.
Could you please give me a brief background of yourself and your main research interests?
From the time I was a boy, I was drawn to nature and concerned about the environment. At age 18, as a student at the University of Massachusetts, Amherst, I saw a listing in the course catalogue titled “Environmental Economics,” and knew right away that this was the subject for me. Before this, I had no interest in economics. None. I had intended to study wildlife biology, but this was a subject that excluded humans, and I was less interested in studying nature without humans than in studying how nature could be saved from, by, and for humans. I should be clearer. I didn’t see humans as having the wrong values. I wasn’t interested in telling other people what they should care about. I just knew that humans were causing more harm to their environment than was good for them; and I somehow knew instinctively that environmental economics would explain the reasons why. As it turned out, I was right. From the time I took that first course in environmental economics (taught by Barry Field, who later wrote a wonderful introductory text on the subject), I was hooked.
It may surprise people to know that I was initially drawn to doing empirical work; my undergraduate honors thesis was on valuation. My interest in theory was stimulated by reading Partha Dasgupta and Geoffrey Heal’s Economic Theory and Exhaustible Resources, published in the same year as I graduated from university. Later, at the University of British Columbia, I combined these interests in my master’s thesis, which featured an optimal control model of oil supply incorporating econometric estimates of key relationships.
Partha Dasgupta’s The Control of Resources, published in 1982, had an enormous influence on me. It used theory to illuminate the issues that I cared the most about—issues concerning nature. It appealed to empirical research, drew from a variety of disciplines, and discussed topics that were novel to me, especially ones of importance to developing countries. I loved the book’s style, the way it combined logic and models to create new ways of understanding. I was spellbound. After reading that book, I knew that I wanted to study under Dasgupta.
All the while that I was maturing as a researcher, the scope and scale of our environmental problems grew and grew. That is why, as I was finishing my PhD (on environmental issues in developing countries) at the London School of Economics, I turned my attention to international and global issues. I was also attracted to these issues because the institutions that we use to address them, especially treaties, had been neglected by the analytical literature. Sovereignty constrains what these institutions can achieve. How to make them more effective? This, to answer your question, is my main research interest. Or should I say my obsession?
What article/book of yours would you call your best?
I am most proud of my book, Environment and Statecraft: The Strategy of Environmental Treaty-Making. To me, papers are mere fragments of a puzzle, whereas books offer an author the opportunity to assemble disparate pieces, to create a fuller image. Even when I write papers, what I’m interested in is the bigger picture. It took me seven years to write this first book, but that’s because, as I set out to construct this bigger picture, I realized that key pieces of the puzzle were missing. I had to write several more articles before I could finish the book.
When you write for journals, the editors and reviewers have you on a tight leash. When you write a book, you have more freedom. In this book, I was able to include things you wouldn’t normally see in an article—things like narratives, anecdotes, drawings, and maps. Stories. Images. This is how we learn about the world. Theory is essential because it structures our thinking; it offers an apparatus that can be taken apart and reassembled or modified by others; it keeps us honest. It is the most wonderful part of our trade. But the stories and images that explain or are explained by theory help people both to understand the theory and to remember it.
I hope you won’t mind if I mention more recent work of mine, a family of three papers: a theory paper, “Climate Treaties and Approaching Catastrophes,” published in JEEM in 2013; and two experimental papers written with Astrid Dannenberg, “Climate Negotiations under Scientific Uncertainty,” published in PNAS in 2012 and “Sensitivity of Collective Action to Uncertainty about Climate Tipping Points,” published in Nature Climate Change in 2013. The theory paper makes strong predictions as to the conditions that would impel countries (and people) to cross, or to avoid crossing, a catastrophic threshold that they all want to avoid. The PNAS paper tests one of the predictions of the theory: that uncertainty about the impact of crossing the threshold has no effect on behavior but that uncertainty about the threshold is decisive. The NCC paper tests another prediction, that a regime shift in nature creates a regime shift in human behavior, with collective action to avoid catastrophe succeeding so long as uncertainty about the threshold is very small and failing if this uncertainty is just a little bit larger than this. Both sets of experiments confirm the predictions of the theory. More than that, they make the theory come alive, by revealing the variance around central tendencies and the reasons for this. I have a deep fondness for this body of work. Working with Astrid has been the greatest joy of my research career.
Would you mind giving a list of essential articles that a young researcher in your line of research should read?
I think a young researcher’s first instinct might be to open up Google Scholar, type in the key words INTERNATIONAL ENVIRONMENTAL AGREEMENTS, and then, perhaps after an initial exploration, add the words GAME THEORY.
Rather than mention the work that would be turned up in such a search, it might be more valuable for me to mention some of the sources that inspired my research before the field developed. After all, what a young researcher should be doing is delving into topics that haven’t been explored, not the topics that have already been picked over. You can’t do a Google search on THINGS ENVIRONMENTAL ECONOMISTS SHOULD KNOW BUT DON’T.
One of the works that inspired me is John Maynard Keynes’s account (most importantly, in The Economic Consequences of the Peace, published in 1919) of the Treaty of Versailles negotiations. Keynes explained the ruin that would surely come from this treaty. Being an eyewitness to its creation, he also saw that the agreement was a product of the three men who met outside Paris to write it: Lloyd George, the British Prime Minister; Woodrow Wilson, the President of the United States; and Georges Clemenceau, the Prime Minister of France. Reading this work makes you reflect on the difference between an outcome and an equilibrium (the Treaty of Versailles was an outcome, but it was not self-enforcing) and on the role of individuals and not only situations in determining an outcome. Reading this work, it is natural to think of treaty negotiations as games and statesmen as players.
Another book that influenced my thinking is Richard Benedick’s Ozone Diplomacy, published in 1991, a couple of years after I started working on this topic. Benedick was the chief US negotiator at the Montreal Protocol talks, and his book explains how the agreement came about. I see his book as a strong complement to the theoretical literature and certainly my papers. When I was based in Washington, DC, I met very often with Ambassador Benedick, and learned from these exchanges.
As I was finishing my first book, I felt that I could learn more about the topic of international environmental cooperation by looking into other issues requiring international cooperation. After all, environmental issues are just a particular category of problem. To me, international cooperation failures are commonplace; successes are rarer. Also, there could be many reasons for a given failure but perhaps not as many reasons for a given success. For both reasons, I think we can learn the most by studying successes. The success that captivated me when I returned to the US in 2000 was the eradication of smallpox. How did the world succeed in eradicating this disease? A third major source of inspiration for my research is the book, Smallpox and its Eradication, which documented the entire effort. As it happens, even before reading this book, I met one of its coauthors, D.A. Henderson, the man who led the effort to eradicate smallpox and a colleague of mine at Johns Hopkins University. Over the years, I got to know D.A. Henderson well, and learned an enormous amount from him. We even wrote a paper together. When I studied smallpox eradication, I figured out that it was a weakest link game, an extreme form of coordination game. It was after working on this problem that I started to connect different pieces of this puzzle of cooperation. It suddenly became clear to me that what was common about the successes is that they all involved coordination. My first book had pointed in this direction, but my work on eradication got me to see the true significance of this insight.
A last source of inspiration I wanted to mention here is Thomas Schelling’s The Strategy of Conflict, an intellectual tour de force that explains the importance, in strategic situations, of concepts like threats and promises, coercion and deterrence, and focal points and coordination. What captivated me about this book was Schelling’s use of simple theory, his reference to classroom experiments and history, and his unique skills of observation and interpretation. When I read this book, I was inspired to believe that I could do research in a way that suited my abilities and perspectives, and not only the norms of the profession. When my first book was about to be published, my publisher asked me to suggest names of people who might write a blurb for the back cover. I didn’t know Schelling, but I was curious what he would think of the book. Would he like it? To my delight, he agreed to read the book and wrote some very nice words that appear on the book’s back cover. Later, he surprised me by inviting me to his house for lunch. We talked for hours. In time, we became friends.
I apologize for going off track with my answer, but I wanted to say that my recommendation to young researchers is not only to read the academic literature in a particular field, but to explore more broadly and, perhaps most of all, to interact with people, especially the people you most admire. Doing these things has been the most rewarding part of my career.
And could you be so kind and give a reference for a policy-oriented article or book that sums the research in your field for an interested policy maker?
My second book, Why Cooperate? The Incentive to Supply Global Public Goods, was written with this reader in mind. It doesn’t sum up the research in my field (I’m not sure that policy makers would want to read such a summary, or know what uses to make of it). Instead, it tells stories of various efforts to establish and sustain international cooperation, and uses theory—without developing or even describing theory—to explain why some of these efforts succeeded and others failed.
In what direction would you like to see environmental economics develop? What would be the obstacles?
A researcher can acquire a skill, and then seek topics on which to apply it, or she can identify a topic in need of explication, and then acquire or invent the tools needed to illuminate it. The first route is safer, and more common place; the second is riskier but ultimately more valuable. (I would put research on the Montreal Protocol by my two of my former students, Ulrich Wagner and Eugenie Dugoua, in this second category.) With the top journals today being preoccupied with empirical research and identification, I am concerned that critical issues are being neglected, simply because the data needed to establish causation do not exist. An allied concern I have is that some of this work is unmoored from theory. Empirical relationships are being established, but are the “right” relationships being tested? Perhaps most importantly, I feel that many of today’s critical environmental issues are unprecedented. Not only do we lack the data to study them, but we also lack the conceptual framework to understand them. Finally, as environmental economics is inherently an interdisciplinary field, progress in the field depends on deepening integration of the allied sciences—ecology, political science, geophysics, epidemiology, philosophy, psychology, etc. Fortunately, PhD programs like Columbia’s program in Sustainable Development are helping to push the field in this direction.
If you had to give young researchers in environmental economics some advice, what would it be?
My advice would be to know yourself, and to do the work you want to do, the work that excites you. Try not to pay too much attention to the signals you are getting from others (including me!) about the work you should do.
How do you mostly get your ideas?
Every paper has its own genesis. Perhaps I should tell you the story of how I came to write my most cited paper, “Self-Enforcing International Environmental Agreements.” It started on September 17th, 1987, the day I learned that an agreement (the Montreal Protocol) had been reached to protect the stratospheric ozone layer. I was excited. Nothing I had read in the literature predicted this agreement. I knew that there were lots of agreements. What I didn’t know was how you could tell whether any of them made a difference. Montreal seemed different, but was it really different? What we needed was a theory that could explain all agreements, the seemingly good ones and the more obviously not-so-good ones. I knew this on this day.
What I didn’t know was how to construct the theory. I was a PhD student at the time. I had learned some game theory, mainly from courses taught by Partha Dasgupta in which he used game theory (I also audited a course on game theory taught by Ken Binmore). I knew resource economics, of course, but this field emphasized the dynamics of resource use, and I wasn’t sure how important dynamics were to this subject. Also, I was wary of using differential game theory. It was hard! One day I attended a lecture by John Sutton in which he presented a paper on cartel stability (by Claude D’Aspremont, Alexis Jacquemin, Jean Jaskold Gabszwewicz, and John Weymark), and right there in that class I knew how to model the problem. I completed a first draft of the paper in 1989, the year I finished my PhD (this paper was not part of my PhD thesis, but I spent the latter part of my PhD defense talking to my examiners, David Pearce and Karl-Göran Mäler, about this new work).
Like the cartel stability paper, my model was static. As I mentioned before, I had decided not to use differential game theory. However, when I described the model and its results to Karl-Göran Mäler, he asked me, “What about the folk theorem?” As soon as he asked this, I knew instantly that he had identified the biggest vulnerability in my approach. According to the folk theorem of repeated games, any number of people could cooperate provided they cared enough about the future. Of course, as my paper was static, it wouldn’t do for me to argue that cooperation failed because people discounted the future too much. Instead, I had to approach this challenge by attacking the equilibrium concept that stood behind the folk theorem. Very quickly I discovered that the concept I needed was that of a renegotiation proof equilibrium. I then revised the paper to include this new section. I think few people have read this section, but it’s a critical part of the paper. What the paper showed is that cooperation depends on the payoffs of the game, which vary from problem to problem (thus helping to explain why some problems are easier to address than others). It was in writing that paper that I began to understand why Montreal would very likely succeed and why cooperation on climate change would be much, much harder. I came to this view in 1989. Thirty years later, I still see things this way.
Returning to your question, where do I get my ideas? From the real world. From reading the literature. From attending lectures on subjects unrelated to the ones that I’m working on. From talking to people. From listening to them.
Are you more interested in fundamental research or do you try to shape actual policy through your research?
I am interested in both. I am not interested in fundamental research for its own sake (though I confess to having strong aesthetic preferences for how models ought to be constructed). I am interested in “changing the world”—or, as you say, trying to shape actual policy through my research. The reason fundamental research interests me is that we need it to be able solve problems like climate change. There is nothing more practical than good theory!
Which impact would you say does your research have on policy making? And how do you think environmental economists could increase their say in the policy agendas?
It’s not easy to have an impact on policy. It’s not even easy to know if you’ve had an impact on policy. You can tell if your work is published or cited, but you can’t normally tell if it shaped a policy decision, particularly if, like me, you work on complex global issues like climate change.
Still, I try to have an impact.
Since the early 2000s, I have recommended a piecemeal approach to negotiating climate agreements, one that emphasizes sectors, technology standards, trade measures, and “tipping.” The Kigali Amendment to the Montreal Protocol, negotiated in late 2016, is the first such agreement to be negotiated. Did my work play any role in causing it to be negotiated? I don’t know.
Occasionally you get lucky. The book I mentioned before on smallpox eradication presented evidence on the costs and benefits of this astounding achievement. There was no effort to obtain this information at the time the decision to pursue the goal was taken, but these numbers were cited later by politicians and others to demonstrate the enormous returns on this investment. Subsequent eradication initiatives, such as the ongoing effort to eradicate polio, have used a cost-benefit framework to justify continued investment. These frameworks have been ad hoc. In some cases, they have been misleading. In a number of papers (one of them coauthored with Michael Hoel), I developed a more coherent framework, and was pleased when the World Health Organization recently asked me to show how this framework could be applied to malaria eradication. To my surprise and delight, I was even invited to join the WHO’s Strategic Advisory Group on malaria eradication. Ultimately, the decision of whether or not to pursue eradication will be based on a number of considerations, with my framework perhaps being one of them. At least in the meetings I attended, my approach seemed to have been accepted as the right one.
Environmental economics has clearly succeeded in some areas, perhaps the use of social cost-benefit analysis and market-based policy instruments being the most obvious examples. Thanks to environmental economists, policy makers are increasingly comfortable with concepts like the social cost of carbon and carbon taxes. At the same time, I think it’s very obvious that the advice that economists offer isn’t adopted wholesale.
To be more influential, economists should look at environmental policy from the perspective of the policymakers themselves rather than from that of an imaginary and convenient “social planner.” Policy is adopted by a political process and implemented by bureaucratic organizations, firms, and individuals. Rather than propose solutions that are “ideal” for a world with a fictitious social planner, in which a “potential Pareto improvement” is the sole decision criterion, we might have more influence if we identified the best attainable and sustainable outcome, given our flawed institutions. As an example, the Kyoto Protocol seems the ideal agreement, looked at from the perspective of a global social planner, thanks to its emphasis on market mechanisms for ensuring cost-effective implementation. And yet, lacking a credible means for enforcement, Kyoto was doomed to fail. Rather than advocate only for market mechanisms, economists should work to show how enforcement can be achieved. William Nordhaus’s recent paper on “Climate Clubs” and new research I am doing with Astrid Dannenberg on linking trade cooperation to climate cooperation are efforts in this direction.
You advised the United Nations, the World Bank, the OECD, the European Commission, and many others. What do you take away from these experiences?
I see policy engagement and academic research as being inseparable and mutually supporting. I bring my academic insights to the policy world, and I get ideas for new research from interacting with policy people. It has always been this way for me.
Here’s an example. In the early 90s, the European Commission asked me to show how member states might negotiate adoption of a carbon tax. To help the Commission, I constructed a simple model, incorporating data on costs and benefits for the different members, and showed how an agreement involving side payments could be reached, relying on the Shapley value (which has the virtue of yielding a unique solution). Throughout the 1990s, I also taught diplomats from the Foreign and Commonwealth Office when they were on home leave in London. I say that I “taught them,” but what I really did was try out my ideas on them. Having done this work for the European Commission, I decided to create a negotiation game that these diplomats could play. What I wanted to know was whether diplomats would negotiate the solution predicted by Shapley value. What I learned was that they didn’t. Their solutions weren’t even close. Different groups negotiated differently, but they all appealed to focal points to reach agreement. Focal points are simple and intuitive and largely arbitrary. The Shapley value was analytically clever and quantitatively precise but also extremely complex to calculate. It was a convenience for the researcher. It wasn’t useful to understanding how agreements are negotiated. After teaching that class, I never used the concept again. There is an art and a science to negotiation (as Howard Raiffa noticed a long time ago). We need to look at both perspectives to come to a real understanding of a human process like negotiation.
You were a lead author of the 2nd assessment report of the IPCC. How did you get this opportunity? How do you feel the assessment reports evolved since?
I was based in the UK then (teaching at the London Business School), and was nominated by the British government to serve as a lead author. It was an exciting opportunity, as in those days (the early 1990s) we didn’t know very much about the economics of climate change. A lot of wonderful people were involved in the process. Coauthors of my chapter included Peter Bohm of the University of Stockholm and Robert Stavins of Harvard University. Other economists working on this report included Karl-Göran Mäler, Joseph Stiglitz, and Kenneth Arrow. I will forever be grateful for this opportunity.
I was disappointed not to be asked to participate the next time around. For sure, different perspectives should be sought, but it seemed to me that the UK’s choice of lead authors in this round had become political.
I was later asked by the US government if I would be willing to serve as a convening lead author for the fifth assessment report. I was told that doing this would require about seven months of my time spread over three years, all of it uncompensated. What an offer! On top of this, as the IPCC considers only the published literature, the focus of such an exercise would be on what we already knew. By this time, I was more interested in creating new research. There is so much that we don’t know. I declined the invitation.
The report that was eventually published was competently done, but few people read the full report. Most people read the Summary for Policymakers, and the section of the Summary that related to the chapter I would have been involved in was devoid of any meaningful content. When I read this Summary, I was glad I had decided not to participate.
Having said this, I support the process. I have continued to make contributions to the IPCC of a more modest kind. I’m particularly supportive of the work on special reports.
One of the real achievements of the IPCC is that it has created a shared understanding among scientists from a large number of nations, and not only from the world’s elite universities and research institutes, of a shared problem that requires global collective action. To know how to address an issue like climate change requires an understanding of cause and effect; of choices and consequences. It requires trust in the science that lies behind these relationships. The IPCC has contributed to this shared understanding. It is probably thanks to the IPCC that in Paris in 2015 nearly all of the world’s countries agreed on a common goal. Agreeing to such a goal won’t solve the problem, but having a shared understanding of cause and effect and the need to act is a precondition for solving it.
What are your aspirations for the future?
My personal aspirations? To solve the climate problem, of course! By which I mean, to come up with concrete proposals for promoting international cooperation to limit climate change—proposals that are actually adopted and implemented and later found to work.
I am also interested in many other issues requiring collective action. I’ve been working for years on a paper on the oceans. Ultimately, I would like to help lay the foundations for a deeper understanding of international cooperation as a general phenomenon.
If there is something in our discipline that you could change, what would it be?
I think there is a tendency for us to look inward as a community, to work on the things journal editors like to publish rather than the things our societies need to understand.
And now for a bit of fun. Do you know the concept of holidays or do you take your papers to the beach?
I sometimes take papers and a pencil and scribbling book to the beach, but also novels and a wiffle ball and bat.
What is your favourite economics joke or anecdote from a conference?
I have been to most of the EAERE conferences, and have enjoyed every one of them. I always leave these conferences feeling lucky to have found a place in our community.
The anecdote that comes to mind relates to a different kind of event. About ten years ago, I was invited to a two-day meeting held outside of London and hosted by Prime Minister Gordon Brown. Many left-of-center leaders attended the meeting, including Romano Prodi, Thabo Mbeki, and Bill Clinton—leaders who were in power, who had lost power, or who hoped to rise to power. (I had been invited to speak at a session on climate change.) During the dinner, Stéphane Dion, leader of the Liberal party in Canada, approached me, flanked by two of his aids. He said he wanted to ask me something. We found an empty table and sat down and he looked me straight in the eye and said that there would soon be an election in Canada (there was speculation about this at the time, but Dion was sure of it) and that he was thinking of running on a platform of imposing a carbon tax. He asked me, Should I do this?
I answered that the economic case for a carbon tax was clear. I said I couldn’t speak to the politics.
He subsequently ran on this platform and lost, not despite of the platform but because of it.
I mention this anecdote because I think we should have this experience in mind when we teach our students and conduct our research. We should ask ourselves, what questions do world leaders want to know the answers to? If we were asked these questions today, how would we answer them? My answer to Dion’s question was weak. I hid behind the limitations of our discipline. I punted on the political dimension of the question. The next time I am asked a question in such a direct way, I hope I will have a better answer.
Please feel free to suggest someone else whose answers you would like to see.