SolACE - Solar Geoengineering in an Analytic Climate Economy | Christian P. Traeger
Christian Traeger is Professor of Economics at the Department of Economics, University of Oslo, Norway. Christian will be discussing the paper ‘SolACE – Solar Geoengineering in an Analytic Climate Economy’ which he co-authored with Felix Meier.
‘Solar geoengineering is an affordable measure to counteract the global temperature increase. We derive a simple policy rule for sulfur-based geoengineering in a state of the art integrated assessment model of climate change. We show how geoengineering affects optimal carbon taxation, deriving the different components of the Pigovian tax. We show how the globally optimal rational for geoengineering and carbon taxation changes in a dynamic Markov game across regions. A quantitative simulation suggests a non-cooperative equilibrium where China as a single mover reduces temperatures to the Paris accord’s most stringent 1.5◦C target by 2100. It “free-drives” on the margin but all regions apart from Russia free-ride in absolute terms. The simulated temperature increase peaks around 2165 exceeding the 2◦C target.’