The potential of climate engineering to substitute or complement abatement of greenhouse gas emissions has been increasingly debated over the last years. The scientific assessment is driven to a large extent by assumptions regarding its effectiveness, costs, and impacts, all of which are profoundly uncertain. We investigate how this uncertainty about climate engineering affects the optimal abatement policy in the near term. Using a two period model of optimal climate policy under uncertainty, we show that although abatement decreases in the probability of success of climate engineering, this relationship is concave implying a rather ‘flat’ level of abatement as the probability of climate engineering becomes a viable policy option. Using a stochastic version of an integrated assessment model, the results are found to be robust to a wide range of specifications. Moreover, we numerically evaluate different correlation structures between climate engineering and the equilibrium climate sensitivity.

The potential of climate engineering to substitute or complement abatement of greenhouse gas emissions has been increasingly debated over the last years. The scientific assessment is driven to a large extent by assumptions regarding its effectiveness, costs, and impacts, all of which are profoundly uncertain. We investigate how this uncertainty about climate engineering affects the optimal abatement policy in the near term. Using a two period model of optimal climate policy under uncertainty, we show that although abatement decreases in the probability of success of climate engineering, this relationship is concave implying a rather ‘flat’ level of abatement as the probability of climate engineering becomes a viable policy option. Using a stochastic version of an integrated assessment model, the results are found to be robust to a wide range of specifications. Moreover, we numerically evaluate different correlation structures between climate engineering and the equilibrium climate sensitivity.