Over the past few weeks, the United States and other nations have slapped a series of new financial sanctions on the Russian Federation and its key officials and oligarchs. The hope is that those sanctions will put enough pressure on Vladimir Putin and associated powers in Russia to convince them to end their brutal war against Ukraine.
Could similar sanctions help protect the planet from countries that fail to meet their international climate obligations?
New economic and social-science research out of Germany and Russia puts that question to the test.
The study — conducted and submitted before the invasion of Ukraine — examined the potential of sanctions to improve international cooperation to address climate change. To accomplish this, the researchers designed an experiment to analyze the actions of individuals from Germany, where sanctions have historically paid off, and Russia, where historical sanctions haven’t been as effective. More than 750 people participated in the study, which assessed how they managed simulated funds devoted to collective risk under scenarios with and without sanctions.
The results were “very surprising,” says lead author Gianluca Grimalda, an experimental economist and social psychologist with the Kiel Institute for the World Economy and the Centre for Global Cooperation Research at Duisburg-Essen University.
Although the paper calls Russia an example of “low-cooperator groups,” the researchers still found that participants representing both nations improved their levels of international financial cooperation under scenarios that included climate sanctions.
“What I would have expected — and what surely many other researchers would have expected — would have been a drop in cooperation in the international interaction,” Grimalda says. “When one mixes high cooperators and low cooperators in a group, normally a ‘bad apple effect’ predominates. That is, high cooperators tend to become dissatisfied with the presence of free riders in their group, and they lower their own cooperation levels. The antagonism between different national groups makes things even worse.”
Grimalda credits their experimental results to two factors. First, they used sanctions, which are more active than you might find in other research into international cooperation. Second, they used a model that focused on avoiding collective losses, rather than one in which international cooperation would simply contribute to the public good.
That doesn’t mean there was no “public good” in their outcome. “This is a ‘positive sum’ game, where a surplus exists if everyone cooperates,” he says.
That makes it different from Russia’s war against Ukraine. “It would be tempting to apply our study to the understanding of the tragedy of Ukraine war, but the context is obviously very different,” he says. “A war is a zero-sum game, or probably a ‘negative-sum game,’ in which everyone loses.”
That said, their experiment showed that individuals from both Germany and Russia would be willing to cooperate with interests from outside their own nations.
Would political leaders follow? Not necessarily. “I often think that decisions made by political leaders do not really reflect the preferences of their citizens,” Grimalda says. “Politicians — especially in autarchies — often have a private agenda that clashes with citizens’ interests and wellbeing. I think there is more distrust and hatred among political leaders than among ordinary citizens of the countries they represent.”
Perhaps that’s one reason why some past sanctions have done more environmental harm than good. “Fascist Italy, imperial Japan and Franco’s Spain all responded to Western energy sanctions by promoting self-sufficiency in fuel production, at tremendous economic and environmental cost,” historian Nicholas Mulder wrote in The Nation in 2019.
To increase their effectiveness, Mulder and other experts suggest that climate sanctions be levied against corporations, not nations.
Progressive Democrats in the United States are already thinking along those lines. Last year Sens. Ed Markey, Elizabeth Warren and Bernie Sanders, along with Rep. Veronica Escobar, called on the Biden administration to levy sanctions against the government officials, individuals and corporations “that are perpetrating the worst climate damage.”
As the legislators wrote in a letter to Secretary of State Antony Blinken and Treasury Secretary Janet Yellen, “Combined with additional climate diplomacy with key countries like China, financial sanctions would ensure that addressing the climate crisis remains at the center of U.S. foreign and national security strategy.” They urged the administration to employ the Global Magnitsky Human Rights Accountability Act and the International Emergency Economic Powers Act to accomplish these climate goals — a new direction for both of those laws.
That call built on ideas set forth in legislation proposed by Markey and Escobar. The Targeting Environmental and Climate Recklessness Act would “restrict access to the U.S. financial system for those individuals and companies most responsible for exacerbating climate change.” The bill was referred to the Committee on Banking, Housing and Urban Affairs in April 2021 but hasn’t moved forward since.
“The climate crisis is an existential threat to our planet, which is why the United States must exhaust all of the tools we possess to hold destructive companies and individuals responsible for contributing to the worst effects of climate change accountable,” Markey tells The Revelator. “I will continue to engage with the Biden administration to use the available domestic and foreign policy tools at our disposal to hold destructive companies and individuals responsible for contributing to the worsening effects of climate change.”
Of course, American companies, CEOs and legislators have in many cases also failed to rein in emissions in the United States, and the country has fallen way behind its climate goals. Democrats last year also proposed a $500 billion tax against big polluters — including U.S.-based companies like Exxon Mobil and Chevron and international players with U.S. subsidiaries. And the European Union could soon vote on a proposal to tax imported goods based on their carbon emissions. Neither of these ideas quite fall into the realm of sanctions, but they could complement tariffs and other efforts.
Of course, the long-term effect of sanctions related to the Russian invasion of Ukraine remain to be seen, and this March Russia claimed sanctions will harm the country’s ability to meet its own (already inadequate) climate goals. Without a clear example of success, legislators may still have difficulty pushing sanctions as a solution to the climate crisis.
But Markey says they remain a viable option. “As the real-world impacts of climate change continue to grow,” he says, “we must urgently and strategically enhance our global strategy to prevent and mitigate harm to the environment, while working to protect those that advocate on the planet’s behalf.”
Climate sanctions may yet prove to be one more tool in the toolbox to help accomplish that.
Previously in The Revelator: