Solar Geoengineering versus Mitigation:The Role of Time Preference

Mariia Belaia, David Keith, Gernot WagnerWork in progress

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Anthropogenic Climate Change: Market Failure

Figure 1: Direct measurements

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Anthropogenic Climate Change: Market Failure

Figure 2: Proxy measurements: reconstruction from ice cores

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Climatic Risk

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Climatic Risk

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Climatic Risk

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Yet ...

1. Climate inertia

2. Socio-economic inertia

3. Technological inertia

4. Population growth, increasing energy demand

5. Limits to adaptation

6. Tragedy of global commons

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Geoengineering

Ultimate goal: reduce negative impacts of climate change.

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Geoengineering

• Carbon dioxide removal (CDR)

• Solar radiation management (SRM)

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SRM: Stratospheric aerosols injection

Figure 3

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The DICE-SRM model:

The DICE-2016 model extended to include SG and uncertainty in climatechange:

• 5- to 1-year timestep.

• SRM enters via radiative forcing changes and damage costs from theSRM side-effects.

• Uncertainty in climate sensitivity.

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The DICE-SRM model

Economy:

W =T∑t=1

1

(1 + ρ)tU(c(t))L(t) (1)

U(c) =c1−η − 1

1− η(2)

Y grosst = AtK

γt L

1−γt (3)

Y nett =

1

1 + Ωt· Y gross

t (4)

Yt = (1− Λt)Ynett (5)

Λt = θt,1µθ2 (6)

Ct = Yt − It (7)

ct =Ct

Lt(8)

It = st · Yt (9)

Kt+1 = It + (1− δK )Kt (10)

0 ≤ µ ≤ 1 is emissions control rate.11 / 23

The DICE-SRM model:

Emissions:

E indt = σt [1− µt ]Y

grosst (11)

Et = E indt + E land

t (12)

Carbon cycle (three-reservoir model):

Matt = b11M

att−1 + b12M

upt−1 + Et (13)

Mupt = b21M

att−1 + b22M

upt−1 + b23M

lot−1 (14)

M lot = b31M

lot−1 + b32M

upt−1 (15)

Radiative Forcing:

Ft = η(log2(Mat

t

Mat1750

)) + F ext − FG

t (16)

Climate Model:

T att = T at

t−1 + ψ1[Ft − ψ2Tatt−1 − ψ3(T at

t−1 − T lot−1)] (17)

T lot = T lo

t−1 + ψ4(T att−1 − T lo

t−1) (18)

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The DICE-SRM model

Damages costs (fraction of gross world product):

Dt = α1Tatt + α2(T at

t )2 + DGt (19)

DGt = β| FG

t

F 2xCO2t

| (20)

Figure 4: Function DG

Calibration:13 / 23

Integrated Assessment Model of Climate and Economy

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I. No Climate Policy

(a)

(c)

(b)

(d)15 / 23

II. Optimal control. DICE-SRM (–) vs DICE (–)

(a)

(c)

(b) DICE-SRM

(d)16 / 23

Higher ρ: 1.5% (–) vs 3% (–)

(a) (b)

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Lower ρ: 1.5% (–) vs 0.1% (–)

(a) (b)

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Higher η: 1.45 (–) vs 2 (–)

(a) (b)

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Social Cost of Carbon

Calibration Model ρ, % η SCC (2020) 2010 USDDefault DICE 1.5 1.45 37.64

DICE-SRM 1.5 1.45 32.18Higher ρ DICE, 3 1.45 15.31

DICE-SRM 3 1.45 14.94Lower ρ DICE 1 1.45 57.57

DICE-SRM 1 1.45 45.52Very low ρ DICE 0.1 1.45 178.84

DICE-SRM 0.1 1.45 133.95Higher η DICE 1.5 2 20.45

DICE-SRM 1.5 2 19.04

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III. Climate Change Uncertainty

Figure 5: DICE-SRM

Figure 6: equilibrium climate sensitivity probability density function

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Expected Utility Framework.

DICE-SRM (–) vs DICE (–)

(a) (b)

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Lower ρ: 1.5% (–) vs 0.1% (–)

(a) (b)

Figure 7

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Solar Radiation Management versus Mitigation

Summary from DICE-SRM:• SRM reduces SCC.• SRM reduces radiative forcing during the period around the peak of

industrial emissions.• SRM reduces the rate of optimal emissions control rate, thus

potentially addressing the question of limited speed of success inemissions reduction.

• Higher the discount rate, further both mitigation and SRM aredelayed.

• Under climate change uncertainty: lower PRTP =⇒ strongerabatement and early and moderate SRM. Otherwise, strong and lateSRM.

Next steps:• Introduce CDR.• Optimal CDR-SRM-mitigation portfolio analyzes for alternative

preference specifications.• Sensitivity with respect to damage costs, CDR costs, and SRM

side-effects.• Explore Epstein-Zin utility (further).

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