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Geoengineering and Abatement: A “flat” Relationship under Uncertainty

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  • Emmerling, Johannes
  • Tavoni, Massimo

Abstract

The potential of geoengineering as an alternative or complementary option to mitigation and adaptation has received increased interest in recent years. The scientific assessment of geoengineering is driven to a large extent by assumptions about its effectiveness, costs, and impacts, all of which are highly uncertain. This has led to a polarizing debate. This paper evaluates the role of Solar Radiation Management (SRM) on the optimal abatement path, focusing on the uncertainty about the effectiveness of SRM and the interaction with uncertain climate change response. Using standard economic models of dynamic decision theory under uncertainty, we show that abatement is decreasing in the probability of success of SRM, but that this relation is concave and thus that significant abatement reductions are optimal only if SRM is very likely to be effective. The results are confirmed even when considering positive correlation structures between the effectiveness of geoengineering and the magnitude of climate change. Using a stochastic version of an Integrated Assessment Model, the results are found to be robust for a wide range of parameters specification.

Suggested Citation

  • Emmerling, Johannes & Tavoni, Massimo, 2013. "Geoengineering and Abatement: A “flat” Relationship under Uncertainty," Climate Change and Sustainable Development 148917, Fondazione Eni Enrico Mattei (FEEM).
    • Handle: RePEc:ags:feemcl:148917
    DOI: 10.22004/ag.econ.148917
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    Cited by:

    1. Manoussi, Vassiliki & Xepapadeas, Anastasios, "undated". "Cooperation and Competition in Climate Change Policies: Mitigation and Climate Engineering when Countries are Asymmetric," Climate Change and Sustainable Development 190930, Fondazione Eni Enrico Mattei (FEEM).
    2. 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.
    3. Emmerling, Johannes & Manoussi, Vassiliki & Xepapadeas, Anastasios, "undated". "Climate Engineering under Deep Uncertainty and Heterogeneity," MITP: Mitigation, Innovation and Transformation Pathways 244329, Fondazione Eni Enrico Mattei (FEEM).
    4. Gernot Klepper & Wilfried Rickels, 2014. "Climate Engineering: Economic Considerations and Research Challenges," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 8(2), pages 270-289.
    5. Tommi Ekholm & Hannele Korhonen, 2016. "Climate change mitigation strategy under an uncertain Solar Radiation Management possibility," Climatic Change, Springer, vol. 139(3), pages 503-515, December.
    6. Baker, Erin & Olaleye, Olaitan & Aleluia Reis, Lara, 2015. "Decision frameworks and the investment in R&D," Energy Policy, Elsevier, vol. 80(C), pages 275-285.
    7. Garth Heutel & Juan Moreno-Cruz & Katharine Ricke, 2016. "Climate Engineering Economics," Annual Review of Resource Economics, Annual Reviews, vol. 8(1), pages 99-118, October.

    More about this item

    Keywords

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    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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