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Anticipating moral hazard undermines climate mitigation in an experimental geoengineering game

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  • Andrews, Talbot M.
  • Delton, Andrew W.
  • Kline, Reuben

Abstract

Geoengineering is sometimes touted as a partial solution to climate change but will only be successful in conjunction with other mitigation strategies. This creates a potential for a “moral hazard”: If people think geoengineering alone will mitigate climate change, they may become overly optimistic and reduce support for other necessary mitigation efforts. We test this in a series of economic games where players in groups must prevent a simulated climate disaster. One player, the “policymaker,” decides whether to implement geoengineering. The rest are “citizens” who decide how much to contribute to incremental mitigation efforts. We find that citizens contribute to mitigation even when the policymaker uses geoengineering. Despite this, policymakers expect that citizens will engage in moral hazard. As a consequence, policymakers do not use geoengineering even though everyone would be better off if they did so. Anticipating moral hazard undermines mitigation even though moral hazard itself does not.

Suggested Citation

  • Andrews, Talbot M. & Delton, Andrew W. & Kline, Reuben, 2022. "Anticipating moral hazard undermines climate mitigation in an experimental geoengineering game," Ecological Economics, Elsevier, vol. 196(C).
  • Handle: RePEc:eee:ecolec:v:196:y:2022:i:c:s0921800922000830
    DOI: 10.1016/j.ecolecon.2022.107421
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    1. Terre Satterfield & Sara Nawaz & Guillaume Peterson St-Laurent, 2023. "Exploring public acceptability of direct air carbon capture with storage: climate urgency, moral hazards and perceptions of the ‘whole versus the parts’," Climatic Change, Springer, vol. 176(2), pages 1-21, February.
    2. Jeffrey Dankwa Ampah & Chao Jin & Haifeng Liu & Mingfa Yao & Sandylove Afrane & Humphrey Adun & Jay Fuhrman & David T. Ho & Haewon McJeon, 2024. "Deployment expectations of multi-gigatonne scale carbon removal could have adverse impacts on Asia’s energy-water-land nexus," Nature Communications, Nature, vol. 15(1), pages 1-14, December.
    3. Beckage, Brian & Lacasse, Katherine & Raimi, Kaitlin T. & Visioni, Daniele, 2023. "Integrating Risk Perception with Climate Models to Understand the Potential Deployment of Solar Radiation Modification to Mitigate Climate Change," RFF Working Paper Series 23-22, Resources for the Future.
    4. Todd L. Cherry & Stephan Kroll & David M. McEvoy, 2023. "Climate cooperation with risky solar geoengineering," Climatic Change, Springer, vol. 176(10), pages 1-14, October.
    5. Christine Merk & Gernot Wagner, 2024. "Presenting balanced geoengineering information has little effect on mitigation engagement," Climatic Change, Springer, vol. 177(1), pages 1-17, January.
    6. Sovacool, Benjamin K. & Baum, Chad M. & Low, Sean, 2023. "Beyond climate stabilization: Exploring the perceived sociotechnical co-impacts of carbon removal and solar geoengineering," Ecological Economics, Elsevier, vol. 204(PA).

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