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Geoengineering, including solar radiation management (SRM), has received increasing scrutiny due to the rise of climate extremes and slow progress in mitigating global carbon emissions. This climate policy option, even as a possibility, can have consequential implications for international climate governance. Here, we study how solar engineering affects the effectiveness and stability of a large set of regional coalitions through numerical simulations. We posit a requirement in terms of global political or economic power and analyze the exclusive membership coalition formation process when coalitions jointly decide on geoengineering and mitigation. We show that geoengineering can provide incentives for cooperation and partially solve the typical trade-off between stability and effectiveness of climate coalitions. However, temperature reduction mostly comes from deploying SRM within the coalition rather than from further emission reductions, thus exposing the world to relatively large-scale deployment of SRM with as of today uncertain potential side effects and risks. [ABSTRACT FROM AUTHOR]

Byline: Massimo Tavoni (1,2), Richard S. J. Tol (3,4,5) Abstract: This paper warns against the risk of underestimating the costs--and the uncertainty about the costs--of achieving stringent stabilization targets. We argue that a straightforward review of integrated assessment models results produces biased estimates for the more ambitious climate objectives such as those compatible with the 2degC of the European Union and the G8. The magnitude and range of estimates are significantly reduced because only the most optimistic results are reported for such targets. We suggest a procedure that addresses this partiality. The results show highly variable costs for the most ambitious scenarios. Author Affiliation: (1) Princeton Environmental Institute, Princeton University, Princeton, NJ, USA (2) Fondazione Eni Enrico Mattei (FEEM), Milan, Italy (3) Economic and Social Research Institute, Dublin, Ireland (4) Institute for Environmental Studies, Vrije Universiteit, Amsterdam, The Netherlands (5) Department of Spatial Economics, Vrije Universiteit, Amsterdam, The Netherlands Article History: Registration Date: 21/04/2010 Received Date: 12/10/2009 Accepted Date: 17/04/2010 Online Date: 08/05/2010

Byline: Valentina Bosetti (1,2,3), Carlo Carraro (2,3,4,5,6), Massimo Tavoni (1,2,3) Abstract: Preparatory talks to the next round of negotiations seem to indicate that a comprehensive agreement to mitigate climate change will not be easily attainable, despite the intentions of the US administration and the high expectations surrounding the Copenhagen meeting. One key reason is to what extent fast growing economies, and especially China, should take actions to reduce their growth of emissions. This paper argues that a turning point for international negotiations on climate change could be achieved if China were to agree on carbon obligations in the future. Results from modelling work suggest that the optimal investment behaviour is to anticipate the implementation of a climate policy by roughly 10 years, and that thus future commitments--if credible--could lead to significantly earlier steps towards carbon mitigation. If fast growing economies, and foremost China, believe in the long term objective of global stabilization of carbon concentrations, it might be economically rationale to sign on future targets, provided developed countries take on immediate action. Such a provision could be beneficial for both the developing and developed world. Author Affiliation: (1) Princeton Environmental Institute, Princeton, NJ, USA (2) Fondazione Eni Enrico Mattei, Milan, Italy (3) Centro Euro-Mediterraneo per i Cambiamenti Climatici, Lecce, Italy (4) University of Venice, Venice, Italy (5) Center for Economic Policy and Research, Washington, DC, USA (6) CESifo, Munich, Germany Article History: Registration Date: 14/09/2009 Received Date: 28/07/2009 Accepted Date: 13/09/2009 Online Date: 21/10/2009 Article note: This paper is part of the research work being carried out by the Sustainable Development Programme of the Fondazione Eni Enrico Mattei. The usual disclaimer applies.

Byline: Valentina Bosetti (1,2), Carlo Carraro (1,2,3,4,5), Alessandra Sgobbi (1,2), Massimo Tavoni (1,2,6) Abstract: Despite the growing concern about actual on-going climate change, there is little consensus on the scale and timing of actions needed to stabilise the concentrations of greenhouse gases. Many countries are unwilling to implement mitigation strategies, at least in the short term, and no agreement on an ambitious global stabilisation target has yet been reached. It is thus likely that international climate policies will be characterized by a high degree of uncertainty over the stringency of the climate objective, and that some countries might delay their participation to global action. What additional economic costs will this delay in the adoption of mitigation measures imply? What would the optimal short-term strategy be given the uncertainty surrounding the climate policy to come? Is there a hedging strategy that decision makers can adopt to cope with delayed action and uncertain targets? This paper addresses these questions by quantifying the economic implications of delaying mitigation action, and by computing the optimal abatement strategy in the presence of uncertainty about a global stabilisation target (which will be agreed upon in future climate negotiations). Results point to short-term inaction as the key determinant for the economic costs of ambitious climate policies. They also indicate that there is an effective hedging strategy that could minimise the cost of climate policy uncertainty over the global stabilisation target: a short-term moderate climate policy would be a good strategy to reduce the costs of delayed action and to cope with uncertainty about the outcome of future climate negotiations. By contrast, failing to curb emissions in the short term imposes rapidly increasing additional costs of compliance. Author Affiliation: (1) Fondazione Eni Enrico Mattei, Corso Magenta 63, Milan, Italy (2) CMCC, Lecce, Italy (3) University of Venice, Venice, Italy (4) CEPR, London, UK (5) CESifo, Munich, Germany (6) Catholic University of Milan, Milan, Italy Article History: Registration Date: 09/06/2009 Received Date: 02/06/2008 Accepted Date: 06/03/2009 Online Date: 23/07/2009 Article note: This paper is part of the research work being carried out by the Climate Change Modelling and Policy Research Programme of the Fondazione Eni Enrico Mattei and by the Climate Impacts and Policy Division of the EuroMediterranean Center on Climate Change. Financial support from the Italian Ministry of the Environment is acknowledged. The financial support of the EC 6FP TranSust.Scan project--Scanning Policy Scenarios for the Transition to Sustainable Economic Structures--is gratefully acknowledged. The authors are grateful for useful comments from participants to the Conference on the 'Economics of Climate Change and Sustainable Development', Chia, Italy, September 2007. The usual disclaimer applies.

This paper examines the dynamics of energy investments and clean energy Research and Development (R&D) using a scenario-based modeling approach. Starting from the global scenarios proposed in the RoSE model ensemble experiment, we analyze the dynamics of investments under different assumptions regarding economic and population growth as well as availability of fossil fuel resources, in the absence of a climate policy. Our analysis indicates that economic growth and the speed of income convergence across countries matters for improvements in energy efficiency, both via dedicated R&D investments but mostly through capital-energy substitution. In contrast, fossil fuel prices, by changing the relative competitiveness of energy sources, create an economic opportunity for radical innovation in the energy sector. Indeed, our results suggest that fossil fuel availability is the key driver of investments in low carbon energy innovation. However, this innovation, by itself, is not sufficient to induce emission reductions compatible with climate stabilization objectives. [ABSTRACT FROM AUTHOR]

This paper investigates whether an inefficient allocation of abatement due to constraints on the use of currently available low carbon mitigation options can promote innovation in new technologies and have a positive impact on welfare. We focus on the case of a nuclear power phase-out and endogenous technical change in energy efficiency and alternative low carbon technologies. The research is inspired by the re-thinking about nuclear power deployment which took place in some countries, especially in Western Europe, after the Fukushima accident in March 2011. The analysis uses an Integrated Assessment Model, WITCH, which features multiple externalities related to greenhouse gas emissions and innovation market failures. Our results show that phasing out nuclear power stimulates R&D investments and deployment of technologies with large learning potential. The resulting technology benefits that would not otherwise occur due to intertemporal and international externalities almost completely offset the economic costs of foregoing nuclear power. The extent of technology benefits depends on the stringency of the climate policy and is distributed unevenly across countries. [ABSTRACT FROM AUTHOR]

This paper compares the results of the three state of the art climate-energy-economy models IMACLIM-R, ReMIND-R, and WITCH to assess the costs of climate change mitigation in scenarios in which the implementation of a global climate agreement is delayed or major emitters decide to participate in the agreement at a later stage only. We find that for stabilizing atmospheric GHG concentrations at 450 ppm CO-only, postponing a global agreement to 2020 raises global mitigation costs by at least about half and a delay to 2030 renders ambitious climate targets infeasible to achieve. In the standard policy scenario-in which allocation of emission permits is aimed at equal per-capita levels in the year 2050-regions with above average emissions (such as the EU and the US alongside the rest of Annex-I countries) incur lower mitigation costs by taking early action, even if mitigation efforts in the rest of the world experience a delay. However, regions with low per-capita emissions which are net exporters of emission permits (such as India) can possibly benefit from higher future carbon prices resulting from a delay. We illustrate the economic mechanism behind these observations and analyze how (1) lock-in of carbon intensive infrastructure, (2) differences in global carbon prices, and (3) changes in reduction commitments resulting from delayed action influence mitigation costs. [ABSTRACT FROM AUTHOR]

This paper examines the dynamics of innovation in low-carbon energy technologies distinguishing between research and development and technology diffusion as a response to alternative climate policies. We assess the implications of second-best policies that depart from the assumption of immediate and global participation and of full technology availability. The analysis highlights the heterogeneous effects of climate policy on different energy R&D programs and discusses the contribution of important determinants such as carbon price and policy stringency, policy credibility, policy and technological spillovers and absorptive capacity. [ABSTRACT FROM AUTHOR]

This paper assesses the economic value associated with the development of various low-carbon technologies in the context of climate stabilization. We analyze the impact of restrictions on the development of specific mitigation technologies, comparing three integrated assessment models used in the RECIPE comparison exercise. Our results indicate that the diversification of the carbon mitigation portfolio is an important determinant of the feasibility of climate policy. Foregoing specific low carbon technologies raises the cost of achieving the climate policy, though at different rates. CCS and renewables are shown to have the highest value, given their flexibility and wide coverage. The costs associated with technology failure are shown to be related to the role that each technology plays in the stabilization scenario, but also to the expectations about their technological progress. In particular, the costs of restriction of mature technologies can be partly compensated by more innovation and technological advancement. [ABSTRACT FROM AUTHOR]