Together with mitigation and adaptation, carbon and solar geoengineering span the universe of possible climate policies.
Abstract:
We introduce geoengineering into an optimal control model of climate economics. Together with mitigation and adaptation, carbon and solar geoengineering span all possible climate policies. Their wildly different characteristics have important implications for policy. We show in the context of our model that: (i) whether emissions are positive or zero the optimal carbon tax always equals the marginal cost of carbon geoengineering; (ii) the introduction of either form of geoengineering leads to higher emissions yet lower temperatures; (iii) in a world with above-optimal cumulative emissions, mitigation alone is insufficient and only a complete set of instruments can minimize climate damages.
Full text: An Economic Anatomy of Optimal Climate Policy (this version: 11 September 2018; HKS Faculty Research Working Paper Series RWP17-028, May 2018; CESifo Working Paper No. 7059, May 2018)
Citation:
Moreno-Cruz, Juan B., Gernot Wagner, and David W. Keith. “An Economic Anatomy of Optimal Climate Policy.” HKS Faculty Research Working Paper Series RWP17-028 (11 September 2018).