ign and lobby for change. The organizations sometimes team up with one another and other NGOs to offer joint press statements and apply pressure to governments and businesses.
Even though Greenpeace makes it clear that they have no permanent allies or enemies, Greenpeace and WWF are typically united on major environmental issues. For example, from the early Save the Whales campaign, WWF and Greenpeace were fighting on the same side for a moratorium on whaling. WWF even raised money so that Greenpeace could purchase its first ship, which was used to confront whalers.
Q: Are they complements or substitutes then?
A: The quick answer is that they are both. They complement one another since they are often able to campaign together and lobby for changes from several stakeholders.
Using the Save the Whales campaign as an example, WWF raised money, gave it to Greenpeace to buy the boat, and then both organizations campaigned for change at the International Whaling Commission. On many key issues, both organizations along with others like Friends of the Earth provide a unified front to campaign for change. With many of these efforts, we might conclude that Greenpeace's media mindbomb approach created urgency and a swell of public support, which in turn made governments and businesses listen to environmental organizations. This gets back to our earlier point about creating value by increasing the WTP for environmental issues.
At the same time, the organizations are substitutes for the simple fact that a donor may choose only one environmental organization to make a donation. WWF and Greenpeace compete for these donations, and from the perspective of the average individual donor, they may be viewed as substitutes.
Q: What organizational challenges lie ahead for WWF and Greenpeace?
A: As I previously mentioned, the major challenge for both organizations is that they are dealing with a public good. Considering that a public good is non-excludable and non-rival, it is difficult to make people pay for it. People will free-ride since they can access the improved environment without paying.
For example, if one government engages in a public initiative for the public good such as improving the air quality by reducing CO2 emissions, the benefit will likely flow to neighboring countries. There may be no incentive for the neighboring country to engage in a similar initiative, especially if it's able to free-ride off of the public good created by the other country. The Kyoto Protocol strives to limit this free-riding problem for CO2 gas reduction by getting the agreement from major polluting countries to publicly commit to a reduction. However, as we've seen in the last 10 years, certain countries have refused to sign the protocol, and other countries will not meet their targets.
We can use the prisoner's dilemma problem to understand the choice that a government must make between lax and stringent environmental policies. By forming a hypothetical 2x2 matrix comparing the benefits and costs of two countries, both countries would be better off by moving to stringent environmental policies. However, if one country moves to stringent policies, the other is better off by staying with lax policies because it will incur less cost and accrue more benefit. There are some generic strategies to change the equilibrium from lax to stringent policies:
- Increase the cost of current policies. In the example, if the cost of current policies increases, the dominant strategy switches to stringent policies.
- Increase the benefit of astringent policy. Firms can perhaps get customers to pay for the stringent policies. There is evidence of this with Fairtrade and premium electricity programs based on renewable energy. If the benefit increases by a certain amount, the dominant strategy becomes a stringent policy.
- Encourage governments and companies to move away from maximizing their own benefit and make them look to the greater good. In the game, this corresponds to playing stringent policies, no matter what.
The under-provision of public goods is an important p