14 September 2023
Citations: Bakalova, I., Belaia, M. Stability of Efficient International Agreements on Solar Geoengineering. Environ Resource Econ (2023). https://doi.org/10.1007/s10640-023-00807-0
Solar geoengineering (SG) may have the potential to reduce extreme climate damages worldwide. Yet, international coordination will make the difference between success and failure in leveraging it. Using a simple game-theoretic framework, we investigate whether the stability of an efficient, self-enforcing international agreement on SG is attainable. We demonstrate that side payments from countries less vulnerable to climate change to those more vulnerable can guarantee the stability of an efficient agreement. The size of the side payments will vary within a zone of possible agreement, which will change depending on certain key assumptions. For example, assuming stronger mitigation reduces the necessary payments. Alternatively, asymmetry in national damages from SG over-provision vs. under-provision justifies larger payments; here, the welfare-optimal strategy may be deployment that makes no one worse off. We also show that an agreement may be stable without side payments if deployment costs are substantial and counter-SG is available, while a moratorium may be socially optimal if SG brings substantial global non-excludable fixed costs.