Climate Engineering under Deep Uncertainty and Heterogeneity

Johannes Emmerling, Vassiliki Manoussi and Anastasios Xepapadeas
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Vassiliki Manoussi: Fondazione Eni Enrico Mattei (FEEM)

No 2016.52, Working Papers from Fondazione Eni Enrico Mattei

Abstract: Climate Engineering, and in particular Solar Radiation Management (SRM) has become a widely discussed climate policy option to study in recent years. However, its potentially strategic nature and unforeseen side effects provide major policy and scientific challenges. We study the role of the SRM implementation and its strategic dimension in a model with two heterogeneous countries with the notable feature of model misspecification on the impacts from SRM. We find that deep uncertainty leads to a reduction in SRM deployment both under cooperation and strategic behavior, which is a more relevant issue if countries act strategically. Furthermore, we demonstrate that the heterogeneity in impacts from SRM has an asymmetric effect on the optimal policy and could typically lead to unilateral SRM implementation. We also consider heterogeneous degrees of ambiguity aversion, in which case the more confident country only will use SRM.

Keywords: Climate Change; Solar Radiation Management; Uncertainty; Robust Control; Differential Game (search for similar items in EconPapers)
JEL-codes: Q53 Q54 (search for similar items in EconPapers)
Date: 2016-08
New Economics Papers: this item is included in nep-ene, nep-env and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Working Paper: Climate Engineering under Deep Uncertainty and Heterogeneity (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2016.52

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