Tipping and reference points in climate change games

Once a tipping point for sufficient investments in low carbon technologies has been reached, and constituencies with stakes in the nascent markets have formed, standard economic forces will sustain the transition to a carbon-neutral economy. We will review some of the recent literature that provides clues about when such reinforcing dynamics take place. In doing so, we will come across related concepts, such as diffusion and feedback. Importantly, given the wide scientific uncertainties surrounding the location of the thresholds, we will discuss the role of expectations and argue that reference points are crucial for supporting cooperation. Intuitively, under uncertainty asymmetries about views on the expected losses from climate change are as important as differences in objective (but elusive) vulnerabilities.