Climate Engineering in an Interconnected World: The Role of Tariffs

Markus Eigruber () and Franz Wirl
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Markus Eigruber: University of Vienna

Dynamic Games and Applications, 2018, vol. 8, issue 3, No 7, 573-587

Abstract: 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.

Keywords: Global warming; Externalities; Tariffs; Asymmetric differential game; Climate engineering (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1007/s13235-018-0261-y

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