Solar Geoengineering, Learning, and Experimentation

60 Pages Posted: 8 Feb 2021 Last revised: 20 Mar 2022

See all articles by David L. Kelly

David L. Kelly

University of Miami - School of Business Administration - Department of Economics

Garth Heutel

Georgia State University

Juan Moreno-Cruz

University of Waterloo - School of Environment, Enterprise and Development

Soheil Shayegh

RFF-CMCC European Institute on Economy and the Environment (EIEE)

Date Written: February 2021

Abstract

Solar geoengineering (SGE) can combat climate change by directly reducing temperatures. Both SGE and the climate itself are surrounded by great uncertainties. Implementing SGE affects learning about these uncertainties. We model endogenous learning over two uncertainties: the sensitivity of temperatures to carbon concentrations (the climate sensitivity), and the effectiveness of SGE in lowering temperatures. We present both theoretical and simulation results from an integrated assessment model, focusing on the informational value of SGE experimentation. Surprisingly, under current calibrated conditions, SGE deployment slows learning, causing a less informed decision. For any reasonably sized experimental SGE deployment, the temperature change becomes closer to zero, and thus more obscured by noisy weather shocks. Still, some SGE use is optimal despite, not because of, its informational value. The optimal amount of SGE is very sensitive to beliefs about both uncertainties.

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Suggested Citation

Kelly, David L. and Heutel, Garth and Moreno-Cruz, Juan and Shayegh, Soheil, Solar Geoengineering, Learning, and Experimentation (February 2021). NBER Working Paper No. w28442, Available at SSRN: https://ssrn.com/abstract=3781329

David L. Kelly (Contact Author)

University of Miami - School of Business Administration - Department of Economics ( email )

P.O. Box 248126
Coral Gables, FL 33124-6550
United States

Garth Heutel

Georgia State University ( email )

Juan Moreno-Cruz

University of Waterloo - School of Environment, Enterprise and Development ( email )

Waterloo, Ontario N2L 3G1
Canada

Soheil Shayegh

RFF-CMCC European Institute on Economy and the Environment (EIEE) ( email )

Via Bergognone, 34
Milan
Italy

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