Trust and CO2 emissions: Cooperation on a global scale

Produced as part of the Evaluating the performance of climate policies CCCEP research programme theme

This paper finds that the culture of cooperation sustained by trust within a country positively affects international cooperative behaviour. It provides evidence that an increase in trust between citizens results in larger cuts in carbon dioxide emissions.

The research challenges the commonly accepted idea that climate change mitigation is not influenced by local social norms, given its global properties. Contradicting this idea, this paper explains that people cooperate in a global public good problem at the local level even when there is no legally binding international agreement.

The paper suggests that the role of trust in the governance of global commons should receive higher attention in the policy agenda. While cultural aspects of a society tend to be very persistent, economists have suggested the use of education as a tool to promote civic virtue and cooperative behaviour in societies. The exploration of factors that foster trust among citizens and how the culture of trust interacts with formal institutions is an active area for further research.

Key points for decision-makers

  • The within-country cooperative culture sustained by trust positively affects international cooperative behaviour.
  • Social norms for trustworthy behaviour create incentives for cooperation with foreign parties even when they are unsure about the trustworthiness of those partners.
  • This paper provides empirical evidence that an increase in trust leads to more global cooperation, measured by larger reductions in carbon dioxide emissions.
  • Causality is established by obtaining a time-varying measure of inherited trust from the trust that descendants of US immigrants have inherited from their ancestors. The measure allows the authors to study how the evolution of trust is correlated with the change in carbon dioxide emissions over time.
  • Inherited trust is a significant factor that explains the changes in carbon dioxide emissions across 26 countries worldwide, including most European countries.
  • The findings provide a plausible explanation for the existence of national, regional and local level greenhouse gas mitigation efforts in the absence of a global agreement for climate change.

ISSN 2515-5717 (Online) – Grantham Research Institute Working Paper series

ISSN 2515-5709 (Online) – CCCEP Working Paper series