Jun 29, 2015 | Atlanta, GA
Dr. Juan Moreno-Cruz, Assistant Professor of Economics, recently published in Resource and Energy Economics. The paper, titled "Mitigation and the Geoengineering Threat," introduces geoengineering in a strategic framework with asymmetric countries. It shows how solar geoengineering technologies, such as increasing the reflectiveness of Earth's atmosphere, alter the incentives to do mitigation. Contrary to what is commonly found in the literature, this paper shows that "the prospect of geoengineering can induce inefficiently high levels of mitigation."
Recent scientific advances have introduced the possibility of engineering the climate system to lower ambient temperatures without lowering greenhouse gas concentrations. This possibility has created an intense debate given the ethical, moral and scientific questions it raises. This paper examines the economic issues introduced when geoengineering becomes available in a standard model where strategic interaction leads to suboptimal mitigation. Geoengineering introduces the possibility of technical substitution away from mitigation, but it also affects the strategic interaction across countries: mitigation decisions directly affect geoengineering decisions. With similar countries, Moreno-Cruz finds these strategic effects create greater incentives for free-riding on mitigation, but with asymmetric countries, the prospect of geoengineering can induce inefficiently high levels of mitigation. The entire paper can be viewed here.