Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/179273
Authors: 
Pfrommer, Tobias
Year of Publication: 
2018
Series/Report no.: 
Discussion Paper Series 644
Abstract: 
Solar Radiation Management (SRM) is a set of potential technologies to counteract climate change. Liability regimes are one potential form of governance institution to avoid global externalities caused by the SRM "free-driver" problem. In this paper I examine the incentives structure and welfare consequences of SRM liability regimes. Characteristics specific to SRM impact on the incentives that liability regimes provide via the definition of harm and the liability standard. Consequently, a liability regime is defined as a combination of a definition of harm and a liability standard in the model. Providing several interpretations of these two dimensions adequate for the SRM context, I show that only one combination implements the social optimum. A numerical implementation of the model yields that the free-driver problem is moderate given a metric of mean temperature and extreme given a metric of mean precipitation. Furthermore, the implementation suggests that liability regimes are generally capable of mitigating the free-driver problem substantially and that the choice of the definition of harm is more consequential than the choice of the liability standard.
Subjects: 
Solar Radiation Management
Liability Regimes
Externalities
Climate Engineering
Free-Driver Scenario
JEL: 
Q53
Q54
K13
Persistent Identifier of the first edition: 
Document Type: 
Working Paper
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