Professor Dr Axel Ockenfels: Research is shaping international climate collaboration

Axel Ockenfels is Professor of Economics at the University of Cologne, Director of the Adenauer School of Government and Director at the Max Planck Institute for Behavioral Economics in Bonn. His work demonstrates how basic economic research can be incorporated into political decision-making processes through interdisciplinary collaboration and international networking – from crisis management to climate negotiations – and thus have a global impact.

1. What role has transfer played in your career so far?

For me, transfer is an integral part of research. Together with colleagues from various disciplines and partners from politics, industry, and society, we translate game-theoretical and behavioural science insights into practical applications. This has resulted in contributions such as energy market design for the transition to renewable energies, managing the energy crisis and the pandemic, and increasing organ and stem cell donations. The key to success is the mutual willingness of researchers and practitioners to learn from each other.

2. Which of your transfer activities would you like to report on, and what can you tell us about them?

One of my long-standing transfer activities is aimed at improving international climate collaboration. The Paris Agreement, with its voluntary commitments, is reaching its limits because it favours free-riding and provides insufficient incentives for ambitious climate protection measures. Therefore, we are developing concepts for climate negotiations with joint, reciprocal obligations in various working groups. In doing so, we combine insights from game, negotiation, and behavioural theory with empirical simulations, and attempt to consider political realities and the different starting points of the countries. The aim is less to develop a perfect theoretical model than to create practicable mechanisms which can actually foster greater climate collaboration.

3. How did you come up with your research topics?

I have been interested in environmental and climate issues ever since I was at school. Modern economics then provided me with the tools to investigate the conditions under which people are willing to collaborate and which institutional framework conditions can facilitate this kind of collaboration. In our research, we combine different methodological approaches: theoretical analyses, simulations, surveys with thousands of participants, as well as laboratory and field experiments to test our hypotheses and negotiation formats in the ‘wind tunnel’. This has enabled us, for example, to understand why past climate negotiations reached their limits and which design elements can improve the chances of success.

4. What concrete social impact have you achieved through this activity so far?

Our findings are incorporated within political discussions and processes. For example, we have contributed proposals for the design of the Climate Club founded at COP28, which now includes 30 countries, and are supporting its further development. Additionally, we are also currently working with experts from around the world on concrete proposals for CO₂ price coordination and sectoral agreements. These contributions have led to the formation of a "Carbon Market Coalition” at the last COP30 climate conference in Belém, which is supported by the EU and China and others. Climate cooperation is a particularly complex global process with an uncertain outcome, but that is exactly what makes knowledge transfer so valuable. If it is possible to translate findings from cooperation and incentive research into political practice, this can have a significant impact for everyone.