Abstract
Solar Radiation Management (SRM) has two characteristics that make it useful for managing climate risk: it is quick and it is cheap. SRM cannot, however, perfectly offset CO2-driven climate change, and its use introduces novel climate and environmental risks. We introduce SRM in a simple economic model of climate change that is designed to explore the interaction between uncertainty in the climate’s response to CO2 and the risks of SRM in the face of carbon-cycle inertia. The fact that SRM can be implemented quickly, reducing the effects of inertia, makes it a valuable tool to manage climate risks even if it is relatively ineffective at compensating for CO2-driven climate change or if its costs are large compared to traditional abatement strategies. Uncertainty about SRM is high, and decision makers must decide whether or not to commit to research that might reduce this uncertainty. We find that even modest reductions in uncertainty about the side-effects of SRM can reduce the overall costs of climate change in the order of 10%.
Highlights
It appears to be technically feasible to engineer an increase in albedo, a planetary brightening, as a means to offset the warming caused by carbon dioxide (CO2) and other greenhouse gases through Solar Radiation Management (SRM) (Keith and Dowlatabadi 1992; Keith 2000; Crutzen 2006; Shepherd et al 2009)
The approach in this paper has proven to be useful for the economic analysis of climate change and we expect it to be insightful for the economic analysis of SRM [see Weitzman (2009) for a recent application of a two period model to analyze climate change policy, and Goulder and Mathai (2000) for an example of the use of a cost minimizing framework with increasing and convex costs to analyze climate policy]
We explore a simple model in which a decision maker chooses the level of emissions abatement and SRM that minimizes the costs of climate change in the face of uncertainty about the impacts of both emissions and SRM
Summary
It appears to be technically feasible to engineer an increase in albedo, a planetary brightening, as a means to offset the warming caused by carbon dioxide (CO2) and other greenhouse gases through Solar Radiation Management (SRM) (Keith and Dowlatabadi 1992; Keith 2000; Crutzen 2006; Shepherd et al 2009). In this paper we ask how optimal policy is affected by risk regarding the side-effects of SRM, in the face of uncertainty about the magnitude of the damages caused by CO2-driven climate change. Because temperature depends on cumulative emissions, we assume emissions are irreversible (Matthews et al 2009) and in that sense, only the level of abatement implemented before learning about the sensitivity of the climate system can help reduce damages caused by temperature changes and ocean acidification. The climate system, responds quickly to changes in radiative forcing in the form of SRM This quickness of response allows SRM to reduce temperature damages after learning about the sensitivity of the climate; eliminating the inertia associated with other forms of climate intervention and abatement.
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