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Strategic implications of counter-geoengineering: clash or cooperation?

Heyen, Daniel, Horton, Joshua and Moreno-Cruz, Juan (2019) Strategic implications of counter-geoengineering: clash or cooperation? Journal of Environmental Economics and Management, 95. pp. 153-177. ISSN 0095-0696

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Identification Number: 10.1016/j.jeem.2019.03.005

Abstract

Solar geoengineering has received increasing attention as an option to temporarily stabilize global temperatures. A key concern is that heterogeneous preferences over the optimal amount of cooling combined with low deployment costs may allow the country with the strongest incentive for cooling, the so-called free-driver, to impose a substantial externality on the rest of the world. We analyze whether the threat of counter-geoengineering technologies capable of negating the climatic effects of solar geoengineering can overcome the free-driver problem and tilt the game in favour of international cooperation. Our game-theoretical model of countries with asymmetric preferences allows for a rigorous analysis of the strategic interaction surrounding solar geoengineering and counter-geoengineering. We find that counter-geoengineering prevents the free-driver outcome, but not always with benign effects. The presence of counter-geoengineering leads to either a climate clash where countries engage in a non-cooperative escalation of opposing climate interventions (negative welfare effect), a moratorium treaty where countries commit to abstain from either type of climate intervention (indeterminate welfare effect), or cooperative deployment of solar geoengineering (positive welfare effect). We show that the outcome depends crucially on the degree of asymmetry in temperature preferences between countries.

Item Type: Article
Additional Information: © 2019 Elsevier Inc.
Divisions: Grantham Research Institute
JEL classification: Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q54 - Climate; Natural Disasters
H - Public Economics > H4 - Publicly Provided Goods > H41 - Public Goods
D - Microeconomics > D6 - Welfare Economics > D62 - Externalities
D - Microeconomics > D0 - General > D02 - Institutions: Design, Formation, and Operations
D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Economic Models of Political Processes: Rent-Seeking, Elections, Legislatures, and Voting Behavior
Date Deposited: 05 Apr 2019 11:27
Last Modified: 17 May 2019 23:07
URI: http://eprints.lse.ac.uk/id/eprint/100424

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