External Publications
2017

Solar geoengineering, uncertainty, and the price of carbon


Authors: G. Heutel, J. Moreno-Cruz, S. Shayegh
Type: Journal
Pages: Volume 87, Pages 24-41
Published in: Journal of Environmental Economics and Management
Date: January 2018

Abstract

We consider the socially optimal use of solar  geoengineering to manage climate change and its  implications for carbon emissions abatement policy.  We show that solar geoengineering is a substitute for  emissions abatement; optimal policy includes less abatement, by up to eight percentage points, and has a lower carbon price, by up to fifteen percent, than  recommended by models that ignore solar  geoengineering. However, it is an imperfect  substitute, since it reduces temperature without  reducing atmospheric or ocean carbon  concentrations. Carbon concentrations are higher but temperature is lower when allowing for solar  geoengineering. Ignoring geoengineering in climate  models can lead to welfare losses of up to 4 percent  of GDP. Uncertainty over climate sensitivity leads to  more abatement and solar geoengineering, while  uncertainty over solar geoengineering damages leads to less geoengineering.

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Solar geoengineering, uncertainty, and the price of carbon

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