Carbon Dioxide Removal and Mitigation Deterrence: A Tractable Benchmark Model

Carbon dioxide removal (CDR) technologies are central to most climate mitigation pathways, yet their future availability risks weakening current abatement efforts — a phenomenon known as mitigation deterrence. This paper develops a transparent two-period benchmark model to explore how political economy forces and behavioral biases shape intertemporal climate choices. We allow for general functional forms as well as uncertainty about climate damages and CDR costs. We further demonstrate the framework’s flexibility by extending it with a simple political-economy module in which lobbying over mitigation and future CDR systematically depresses abatement. The model provides a useful starting point for future research on the complex interactions between CDR expectations, current mitigation efforts, and climate policy.