The Incredible Economics of Geoengineering

Barrett’s focus is the different incentives that states face with respect to adopting geoengineering programs unilaterally rather than incorporating it as part of an existing climate change policy. He takes as given that the conventional policies centered on reducing concentrations of greenhouse gases are both expensive and hindered by a free rider problem. Moreover the incentives for countries to reduce emissions are weaker than the incentives to develop and deploy geoengineering unilaterally. He calls geoengineering and emission reduction substitutes but calls for a policy framework that includes emission reduction, funding R&D into new energy technologies, and geoengineering with adaptation assistance to poorer countries. However, a lack of commitment from states who stand to benefit from climate change (in the short run) makes verification of such a three-pronged climate policy regime difficult. In general, the low costs of geoengineering make it difficult to garner commitment from states not to pursue it unilaterally. Additionally, since one country can offset more than its own greenhouse emissions through a unilateral policy verification of compliance or non-compliance becomes much more challenging.

The central question of Barrett’s article is how can we deter states from adopting unilateral geoengineering programs when the costs of doing so are so low. This is a question to which I don’t think he reaches a convincing answer. He mentions the possibility of temporary uses of geoengineering to “buy time,” effectively smoothing humps in concentrations until an international policy for stabilizing concentrations is agreed upon. However, even temporary uses of geoengineering erode the credibility of emission reduction policies. This question is further complicated by countries like China, who have benefited from climate change and whose continued growth necessitates at least current levels of greenhouse emissions. The countries most susceptible to climate change happen to be the ones least able to pursue and develop geoengineering programs. Barrett views the effective curbing of climate change as a global public good and, as such, there is a question of whether the same countries financing geoengineering projects should have the sole decision making power. This problem of governance is the greatest danger facing geoengineering policy decisions since acting unilaterally carries greater incentive than acting within an institutional framework.

Barrett’s proposed next steps call for two international institutions, the Intergovernmental Panel on Climate Change and the Framework Convention on Climate Change, to further examine the possibility of geoengineering as a viable addition to the climate change regime. He suggests mandating how and when geoengineering may be used and how any costs of such an effort should be shared. A question he leaves unanswered, and one which I am particularly interested in, is how these institutions will prevent any country’s misuse of geoengineering programs especially when the incentives in place do not encourage compliance. In other words, defecting seems highly likely at the expense of countries who lack the means to develop geoengineering programs to offset the negative externalities of high-growth economies like China. — Tyler