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Climate Engineering in an Interconnected World: The Role of Tariffs

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  • Markus Eigruber

    (University of Vienna)

  • Franz Wirl

    (University of Vienna)

Abstract

This paper investigates strategic trade policies as a response to negative externalities linked to climate engineering. Parties negatively affected, or which only perceive damages, may react to geoengineering by deploying trade sanctions, i.e. the imposition of tariffs. By introducing a dynamic trade model, we show that geoengineering-averse countries have an incentive to implement or increase existing tariffs when the other country uses geoengineering. Our contribution is to highlight that potential consequences on trade should be taken into account before climate engineering techniques are applied. This is particularly crucial in our globalized world since a successful climate policy demands large scale if not global cooperation.

Suggested Citation

  • Markus Eigruber & Franz Wirl, 2018. "Climate Engineering in an Interconnected World: The Role of Tariffs," Dynamic Games and Applications, Springer, vol. 8(3), pages 573-587, September.
    • Handle: RePEc:spr:dyngam:v:8:y:2018:i:3:d:10.1007_s13235-018-0261-y
    DOI: 10.1007/s13235-018-0261-y
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    References listed on IDEAS

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    2. Irina Bakalova & Mariia Belaia, 2023. "Stability of Efficient International Agreements on Solar Geoengineering," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 86(3), pages 673-712, November.

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