Carbon Majors, Social Choice, and Anticommons: Addressing Climate Change Mitigation Policy Formation in the Industrial Sector

While many legal rules and paradigms work from the assumption that since the corporation is a legal person, it must have a 'singular mind', this chapter explores the alternative concept, that the corporation remains composed of many people and that corporate decisions are subject to the studies of voting theory, social choice theory, and anticommons decision structures. This chapter explores what that might mean for industry and corporate actors who are attempting to achieve carbon reduction strategies to enable climate change mitigation. Social choice theory examines the ability of diverse actors to unify their preferences or aspirational goals into a singular rational agenda; the findings of Arrow, Satterthwaite, Gibbard and May suggest that corporate decision making as a social exercise might be less than effective. Anticommons decision structures examines group-based decision- making from a different perspective, that certain actors may have full or partial veto powers over the decision-making process. As such, this can cause a 'tragedy of the anticommons' which frustrates the ability to reach any decision. Together, these findings suggest that when industry relies on corporations who make decisions in a social setting, as described above, then the corporate actors are likely to make inefficient or errant decisions on their strategic choices on how best to enable climate change mitigation. These findings are followed by discussions on which approach to governance might be most efficacious in enabling corporate actors to make better decisions on carbon budgets and on climate change mitigation strategies. In particular, stronger regulatory approaches that set more clear menus are recommended if policy makers seek to effectively change industrial behavior on climate change mitigation.