The role of international liability in the regulation of SRM field research: An economic analysis...
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The role of international liability in the regulation of SRM field research: An
economic analysisJesse L. Reynolds – [email protected]
Faculty of Law, University of Tilburg
2
Today
• SRM field research and its risks
• Regulating research
• Economic analysis of law
• Relevant conditions of SRM research
• Consider possibilities
• A tentative proposal
Reynolds, Climate engineering research & international liability, 2014
3
SRM field research risks
Reynolds, Climate engineering research & international liability, 2014
• SRM may be beneficial
• SRM will have risks
• Scientists will do (field) research to learn
• Large scale field research will have risks
4
Means of “regulation” of SRM field research
Reynolds, Climate engineering research & international liability, 2014
• Existing (international) rules
• New (international) rules
• Moratorium
• Institutions
• Norms
• Liability?
5
Goals of “regulation” of SRM field research
Reynolds, Climate engineering research & international liability, 2014
• Reduces risk from research
• Allows potential of SRM
• Consistent with legal norms
• Compensates victims
• Low administrative costs
• Politically feasible
6
Economic analysis of law (1/2)
Reynolds, Climate engineering research & international liability, 2014
• Accidents (prevention and compensation)
• Risky activity has benefits
• Risks borne by others
• Not internalized in decision making
• Not just
• How to incentivize socially optimal levels of activity and care, i.e. max(benefit-cost)?
• And how to compensate?
7
Economic analysis of law (2/2)
Reynolds, Climate engineering research & international liability, 2014
• Conditions:
• Who (injurer, victim, gov’t) knows what?
• Who can do what?
• What would be efficient?
• Compare regulatory tools:
• Rules
• Liability
• Injunctions
• Taxes
• Fines
• Insurance for injurers and victims
8
An economic analysis: Conditions (1/2)
Reynolds, Climate engineering research & international liability, 2014
• SRM research would be socially beneficial
• Research would impose risks
• Researchers have better information re: risk reduction
• Researchers do not capture most of the benefits
• Assumes no patents, open publication
• Like a public good -> underproduced, subsidized
• Researchers want to know and publicize external negative effects
• Research will be state sanctioned
• Researchers will coordinate efforts
9
An economic analysis: Conditions (2/2)
Reynolds, Climate engineering research & international liability, 2014
• Researchers have low ability to pay damages
• Injurers and victims may not have access to insurance
• Victims can take some care to reduce harm
• Victims’ info re: harm inflicted appears to be weak, and
• Harm would be widely dispersed, but:
• States as victims
• Researchers seeking and sharing information
• Causation will be difficult
• Politically controversial -> compensation will be important
10
An economic analysis: Regulatory possibilities? (1/2)
Reynolds, Climate engineering research & international liability, 2014
• Rules?
• Limited: Knowledge of researcher vs. government
• CE changing
• First party insurance; state reinsurer?
• Poor access
• Victim pays
• Researchers strictly liable; insurance; state reinsurer / residuals?
• No insurance market
• Bankruptcy or high premiums
• Disincentive for public good production
11Reynolds, Climate engineering research & international liability, 2014
• State liability?
• Disincentive for public good production
• States collectively liable?
• Compensation not liability
• No incentives
An economic analysis: Regulatory possibilities? (2/2)
12
A regulation proposal (1/2): General rules
Reynolds, Climate engineering research & international liability, 2014
• Researching Parties’ commitments for SRM research
• General safety standards (specific nationally)
• Environmental assessment
• Notification
• Consultation
• Public input
• State approval of projects
• Open publication of results
• No prohibitive SRM patents
• International coordination
13
A regulation proposal (2/2): Liability / compensation
Reynolds, Climate engineering research & international liability, 2014
• Parties contribute to a compensation fund
• Mix of ability to pay, past emissions, and potential benefit
• Only harm in Party’s territory eligible
• Parties forego other legal action
• Claims limited in time, extent, amount
• Causation examined by an expert claims commission
• Proportional awards for uncertainty; threshold?
• Limited state liability if at fault, i.e. failed in its commitments
• [Sanctions of researcher, if at fault?]
• Fund pays all or remaining damages
• Contributory negligence?
14
Politically feasible?
Reynolds, Climate engineering research & international liability, 2014
• All Parties get
• Something ≈ equitable sharing of (monetized) risk
• Researching Parties get:
• Clarity and limitation of liability
• Endorsement of a controversial but potentially beneficial activity
• Parties at risk of research’s negative effects get:
• Assurance of responsibility
• Potential compensation
• Clarity of process