IDEAS home Printed from https://ideas.repec.org/p/drm/wpaper/2019-3.html
   My bibliography  Save this paper

Mitigation strategies under the threat of solar radiation management

Author

Listed:
  • Fabien Prieur
  • Martin Quaas
  • Ingmar Schumacher

Abstract

The option to tackle climate change by means of Solar Radiation Management (SRM) is mostly thought to reduce efforts of mitigating greenhouse gas emissions. Here we hypothesize that (i) a unilateral threat to employ SRM can induce players to commit to strategies with increased mitigation effort compared to what would be observed at the Nash equilibrium in emission strategies only and (ii) there exists a way to share the burden imposed by commitment to avoid SRM that Pareto dominates an alternative that would involve too high current emission levels then followed by future SRM deployment. To study these hypotheses we develop a two-region, two-stage, two-period game where regions choose mitigation and SRM. While SRM targets regional climate preferences, in line with current scientific evidence its deployment leads to uncertain damages on the other region. We first develop the general theory and then study a more specific linear-quadratic application. Finally we calibrate the model to real-world data and find that hypothesis (ii) holds for plausible values.

Suggested Citation

  • 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.
  • Handle: RePEc:drm:wpaper:2019-3
    as

    Download full text from publisher

    File URL: https://economix.fr/pdf/dt/2019/WP_EcoX_2019-3.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Johannes Emmerling & Massimo Tavoni, 2018. "Climate Engineering and Abatement: A ‘flat’ Relationship Under Uncertainty," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 69(2), pages 395-415, February.
    2. Moreno-Cruz, Juan B. & Smulders, Sjak, 2017. "Revisiting the economics of climate change: the role of geoengineering," Research in Economics, Elsevier, vol. 71(2), pages 212-224.
    3. Roberto Roson & Martina Sartori, 2016. "Estimation of Climate Change Damage Functions for 140 Regions in the GTAP 9 Database," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 1(2), pages 78-115, December.
    4. Martin L. Weitzman, 2011. "Fat-Tailed Uncertainty in the Economics of Catastrophic Climate Change," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 5(2), pages 275-292, Summer.
    5. Krawczyk, Jacek B., 2005. "Coupled constraint Nash equilibria in environmental games," Resource and Energy Economics, Elsevier, vol. 27(2), pages 157-181, June.
    6. Martin L. Weitzman, 2015. "A Voting Architecture for the Governance of Free-Driver Externalities, with Application to Geoengineering," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(4), pages 1049-1068, October.
    7. Jacqueline Morgan & Fabien Prieur, 2013. "Global emission ceiling versus international cap and trade: what is the most efficient system to solve the climate change issue?," Post-Print hal-02649260, HAL.
    8. Martin L. Weitzman, 2009. "On Modeling and Interpreting the Economics of Catastrophic Climate Change," The Review of Economics and Statistics, MIT Press, vol. 91(1), pages 1-19, February.
    9. Daniel Heyen & Thilo Wiertz & Peter Irvine, 2015. "Regional disparities in SRM impacts: the challenge of diverging preferences," Climatic Change, Springer, vol. 133(4), pages 557-563, December.
    10. Katharine L. Ricke & Daniel J. Rowlands & William J. Ingram & David W. Keith & M. Granger Morgan, 2012. "Effectiveness of stratospheric solar-radiation management as a function of climate sensitivity," Nature Climate Change, Nature, vol. 2(2), pages 92-96, February.
    11. Juan Moreno-Cruz & Katharine Ricke & David Keith, 2012. "A simple model to account for regional inequalities in the effectiveness of solar radiation management," Climatic Change, Springer, vol. 110(3), pages 649-668, February.
    12. Heutel, Garth & Moreno-Cruz, Juan & Shayegh, Soheil, 2016. "Climate tipping points and solar geoengineering," Journal of Economic Behavior & Organization, Elsevier, vol. 132(PB), pages 19-45.
    13. Moreno-Cruz, Juan B., 2015. "Mitigation and the geoengineering threat," Resource and Energy Economics, Elsevier, vol. 41(C), pages 248-263.
    14. 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.
    15. Ryo Moriyama & Masahiro Sugiyama & Atsushi Kurosawa & Kooiti Masuda & Kazuhiro Tsuzuki & Yuki Ishimoto, 2017. "The cost of stratospheric climate engineering revisited," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 22(8), pages 1207-1228, December.
    16. -, 2009. "The economics of climate change," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 38679, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    17. Myles R. Allen & William J. Ingram, 2002. "Constraints on future changes in climate and the hydrologic cycle," Nature, Nature, vol. 419(6903), pages 224-232, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Manoussi, Vassiliki & Xepapadeas, Anastasios & Emmerling, Johannes, 2018. "Climate engineering under deep uncertainty," Journal of Economic Dynamics and Control, Elsevier, vol. 94(C), pages 207-224.
    2. 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).
    3. Juan Moreno-Cruz & David Keith, 2013. "Climate policy under uncertainty: a case for solar geoengineering," Climatic Change, Springer, vol. 121(3), pages 431-444, December.
    4. 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.
    5. Heyen, Daniel & Horton, Joshua & Moreno-Cruz, Juan, 2019. "Strategic implications of counter-geoengineering: Clash or cooperation?," Journal of Environmental Economics and Management, Elsevier, vol. 95(C), pages 153-177.
    6. Heutel, Garth & Moreno-Cruz, Juan & Shayegh, Soheil, 2018. "Solar geoengineering, uncertainty, and the price of carbon," Journal of Environmental Economics and Management, Elsevier, vol. 87(C), pages 24-41.
    7. Daniel Heyen & Thilo Wiertz & Peter Irvine, 2015. "Regional disparities in SRM impacts: the challenge of diverging preferences," Climatic Change, Springer, vol. 133(4), pages 557-563, December.
    8. Johannes Emmerling & Massimo Tavoni, 2017. "Quantifying Non-cooperative Climate Engineering," Working Papers 2017.58, Fondazione Eni Enrico Mattei.
    9. Acemoglu, Daron & Rafey, Will, 2023. "Mirage on the horizon: Geoengineering and carbon taxation without commitment," Journal of Public Economics, Elsevier, vol. 219(C).
    10. Simon Levin & Anastasios Xepapadeas, 2021. "On the Coevolution of Economic and Ecological Systems," Annual Review of Resource Economics, Annual Reviews, vol. 13(1), pages 355-377, October.
    11. Pindyck, Robert S., 2019. "The social cost of carbon revisited," Journal of Environmental Economics and Management, Elsevier, vol. 94(C), pages 140-160.
    12. Benjamin Jones & Michael Keen & Jon Strand, 2013. "Fiscal implications of climate change," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(1), pages 29-70, February.
    13. Todd Sandler, 2018. "Collective action and geoengineering," The Review of International Organizations, Springer, vol. 13(1), pages 105-125, March.
    14. W. A. Brock & A. Xepapadeas, 2015. "Modeling Coupled Climate, Ecosystems, and Economic Systems," Working Papers 2015.66, Fondazione Eni Enrico Mattei.
    15. Fei Teng & Frank Jotzo, 2014. "Reaping the Economic Benefits of Decarbonization for China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 22(5), pages 37-54, September.
    16. Kemp-Benedict, Eric, 2014. "Shifting to a Green Economy: Lock-in, Path Dependence, and Policy Options," MPRA Paper 60175, University Library of Munich, Germany.
    17. Devin Michelle Bunten & Matthew E. Kahn, 2014. "The Impact of Emerging Climate Risks on Urban Real Estate Price Dynamics," NBER Working Papers 20018, National Bureau of Economic Research, Inc.
    18. Matteo Coronese & Francesco Lamperti & Francesca Chiaromonte & Andrea Roventini, 2018. "Natural Disaster Risk and the Distributional Dynamics of Damages," LEM Papers Series 2018/22, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    19. Frederick Ploeg, 2021. "Carbon pricing under uncertainty," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(5), pages 1122-1142, October.
    20. Chanel, Olivier & Chichilnisky, Graciela, 2013. "Valuing life: Experimental evidence using sensitivity to rare events," Ecological Economics, Elsevier, vol. 85(C), pages 198-205.

    More about this item

    Keywords

    climate change; solar radiation management; heterogeneous damages; strategic interaction; commitment;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:drm:wpaper:2019-3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Valerie Mignon (email available below). General contact details of provider: https://edirc.repec.org/data/modemfr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.