Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/149525
Authors: 
Emmerling, Johannes
Manoussi, Vassiliki
Xepapadeas, Anastasios
Year of Publication: 
2016
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 52.2016
Abstract: 
Climate Engineering, and in particular Solar Radiation Management (SRM) has become a widely discussed climate policy option to study in recent years. However, its potentially strategic nature and unforeseen side effects provide major policy and scientific challenges. We study the role of the SRM implementation and its strategic dimension in a model with two heterogeneous countries with the notable feature of model misspecification on the impacts from SRM. We find that deep uncertainty leads to a reduction in SRM deployment both under cooperation and strategic behavior, which is a more relevant issue if countries act strategically. Furthermore, we demonstrate that the heterogeneity in impacts from SRM has an asymmetric effect on the optimal policy and could typically lead to unilateral SRM implementation. We also consider heterogeneous degrees of ambiguity aversion, in which case the more confident country only will use SRM.
Subjects: 
Climate Change
Solar Radiation Management
Uncertainty
Robust Control
Differential Game
JEL: 
Q53
Q54
Document Type: 
Working Paper

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