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Cost-Risk Trade-Off of Mitigation and Solar Geoengineering: Considering Regional Disparities Under Probabilistic Climate Sensitivity

Author

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  • Elnaz Roshan

    (Center for Earth System Research and Sustainability (CEN), University of Hamburg)

  • Mohammad M. Khabbazan

    (Center for Earth System Research and Sustainability (CEN), University of Hamburg)

  • Hermann Held

    (Center for Earth System Research and Sustainability (CEN), University of Hamburg)

Abstract

Solar geoengineering (SGE) constitutes a viable option to ameliorate anthropogenic temperature rise. However, it does not simultaneously compensate for anthropogenic changes in further climate variables in a perfect manner. Here, we investigate to what extent a proponent of the 2 °C-temperature target would apply SGE in conjunction with mitigation in view of regional disparities in temperature and precipitation. We apply cost-risk analysis (CRA), which is a decision analytic framework that trades-off expected welfare-loss from climate policy costs and climate risks from transgressing a climate target. Here, in ‘Giorgi’-regional-scale analyses, we evaluate the optimal mix of SGE and mitigation under probabilistic information about climate sensitivity and generalize CRA in order to include regional temperature and precipitation risks. In addition to a mitigation-only analysis, social welfare is maximized for the following three joint-mitigation-SGE scenarios: temperature-risk-only, precipitation-risk-only, and equally weighted both-risks. We find that for regionally differentiated precipitation targets, the usage of SGE will be restricted. Our results indicate that SGE would save 70–75% of welfare-loss in the precipitation-risk-only and both-risks scenarios compared to a purely mitigation-based analysis with approximate overall welfare loss of 4% in terms of balanced growth equivalent from economic costs and climate risks.

Suggested Citation

  • Elnaz Roshan & Mohammad M. Khabbazan & Hermann Held, 2019. "Cost-Risk Trade-Off of Mitigation and Solar Geoengineering: Considering Regional Disparities Under Probabilistic Climate Sensitivity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 72(1), pages 263-279, January.
    • Handle: RePEc:kap:enreec:v:72:y:2019:i:1:d:10.1007_s10640-018-0261-9
    DOI: 10.1007/s10640-018-0261-9
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    Cited by:

    1. Traeger, Christian P. & Meier, Felix D., 2023. "Uncertain Remedies to Fight Uncertain Consequences: The Case of Solar Geoengineering," RFF Working Paper Series 23-37, Resources for the Future.
    2. Judith Kreuter & Nils Matzner & Christian Baatz & David P. Keller & Till Markus & Felix Wittstock & Ulrike Bernitt & Nadine Mengis, 2020. "Unveiling assumptions through interdisciplinary scrutiny: Observations from the German Priority Program on Climate Engineering (SPP 1689)," Climatic Change, Springer, vol. 162(1), pages 57-66, September.
    3. Elettra Agliardi & Anastasios Xepapadeas, 2019. "Introduction: Special Issue on the Economics of Climate Change and Sustainability," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 72(1), pages 1-4, January.
    4. Rickels, Wilfried & Quaas, Martin F. & Ricke, Katharine & Quaas, Johannes & Moreno-Cruz, Juan & Smulders, Sjak, 2020. "Who turns the global thermostat and by how much?," Energy Economics, Elsevier, vol. 91(C).
    5. Mohammad M. Khabbazan, 2022. "Cost-Risk Analysis Reconsidered—Value of Information on the Climate Sensitivity in the Integrated Assessment Model PRICE," Energies, MDPI, vol. 15(11), pages 1-17, June.
    6. Held, Hermann, 2020. "Cost Risk Analysisː How Robust Is It in View of Weitzman's Dismal Theorem and Undetermined Risk Functions?," WiSo-HH Working Paper Series 55, University of Hamburg, Faculty of Business, Economics and Social Sciences, WISO Research Laboratory.
    7. Odenweller, Adrian, 2022. "Climate mitigation under S-shaped energy technology diffusion: Leveraging synergies of optimisation and simulation models," Technological Forecasting and Social Change, Elsevier, vol. 178(C).

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