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Are there reasons against open-ended research into solar radiation management? A model of intergenerational decision-making under uncertainty

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  • Quaas, Martin F.
  • Quaas, Johannes
  • Rickels, Wilfried
  • Boucher, Olivier

Abstract

Solar radiation management (SRM) has been proposed as a means of last resort against dangerous climate change. We propose a stylized model of intergenerational decision making on SRM research, greenhouse-gas abatement and SRM deployment, under uncertainties about (a) the extent of future climate damage and (b) effectiveness and potential harmful side-effects of SRM. Open-ended research may reveal either that SRM effectively reduces climate damage, or that it would cause more harm than benefits. We find that SRM research increases the likelihood of deployment (“slippery slope”), and derive conditions that it decreases abatement effort in expectation (“moral hazard”). Neither of these provides a rationale against SRM research, though. The rational decision is to perform SRM research, unless (i) discounting is hyperbolic and (ii) the absolute prudence of expected climate damage is smaller than absolute risk aversion. These results generalize to the case where SRM research also provides information on climate sensitivity.

Suggested Citation

  • Quaas, Martin F. & Quaas, Johannes & Rickels, Wilfried & Boucher, Olivier, 2017. "Are there reasons against open-ended research into solar radiation management? A model of intergenerational decision-making under uncertainty," Journal of Environmental Economics and Management, Elsevier, vol. 84(C), pages 1-17.
    • Handle: RePEc:eee:jeeman:v:84:y:2017:i:c:p:1-17
    DOI: 10.1016/j.jeem.2017.02.002
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    2. Jesse L. Reynolds, 2021. "Is solar geoengineering ungovernable? A critical assessment of governance challenges identified by the Intergovernmental Panel on Climate Change," Wiley Interdisciplinary Reviews: Climate Change, John Wiley & Sons, vol. 12(2), March.
    3. Fabien Prieur & Martin Quaas & Ingmar Schumacher, 2019. "Mitigation strategies under the threat of solar radiation management," EconomiX Working Papers 2019-3, University of Paris Nanterre, EconomiX.
    4. Rickels, Wilfried & Merk, Christine & Honneth, Johannes & Schwinger, Jörg & Quaas, Martin F. & Oschlies, Andreas, 2019. "Welche Rolle spielen negative Emissionen für die zukünftige Klimapolitik? Eine ökonomische Einschätzung des 1,5°C-Sonderberichts des Weltklimarats," Kiel Working Papers 2116, Kiel Institute for the World Economy (IfW Kiel).
    5. Acemoglu, Daron & Rafey, Will, 2023. "Mirage on the horizon: Geoengineering and carbon taxation without commitment," Journal of Public Economics, Elsevier, vol. 219(C).
    6. Piergiuseppe Pezzoli & Johannes Emmerling & Massimo Tavoni, 2023. "SRM on the table: the role of geoengineering for the stability and effectiveness of climate coalitions," Climatic Change, Springer, vol. 176(10), pages 1-21, October.
    7. Hänsel, Martin C. & Quaas, Martin F., 2018. "Intertemporal Distribution, Sufficiency, and the Social Cost of Carbon," Ecological Economics, Elsevier, vol. 146(C), pages 520-535.
    8. Emmerling, Johannes & Tavoni, Massimo, 2017. "Quantifying Non-cooperative Climate Engineering," MITP: Mitigation, Innovation and Transformation Pathways 266289, Fondazione Eni Enrico Mattei (FEEM).
    9. Ahlvik, Lassi & Iho, Antti, 2018. "Optimal geoengineering experiments," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 148-168.
    10. Adrien Fabre & Gernot Wagner, 2020. "Availability of risky geoengineering can make an ambitious climate mitigation agreement more likely," Palgrave Communications, Palgrave Macmillan, vol. 7(1), pages 1-4, December.
    11. Bos, Björn & Drupp, Moritz & Meya, Jasper & Quaas, Martin, 2021. "The Commons Problem under Uncertainty and Precaution," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242471, Verein für Socialpolitik / German Economic Association.
    12. Dipu, Sudhakar & Quaas, Johannes & Quaas, Martin & Rickels, Wilfried & Mülmenstädt, Johannes & Boucher, Olivier, 2021. "Substantial Climate Response outside the Target Area in an Idealized Experiment of Regional Radiation Management," Open Access Publications from Kiel Institute for the World Economy 240193, Kiel Institute for the World Economy (IfW Kiel).

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    More about this item

    Keywords

    Climate economics; Climate engineering; Geoengineering; Solar radiation management; Learning; Hyperbolic discounting; Intergenerational decision-making; Precautionary effort;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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