Wednesday, January 9, 2013

Weitzman on Geoengineering Governance

Is it just me, or does Marty Weitzman seem to have a new working paper about every month? The latest one (to my knowledge) is an NBER working paper (here, behind a pay wall for nonsubscribers). Here is the abstract:
Climate change is a global "free rider" problem because significant abatement of greenhouse gases is an expensive public good requiring international cooperation to apportion compliance among states. But it is also a global "free driver" problem because geoengineering the stratosphere with reflective particles to block incoming solar radiation is so cheap that it could essentially be undertaken unilaterally by one state perceiving itself to be in peril. This paper develops the main features of a "free driver" externality in a simple model based on the asymmetric consequences of type-I and type-II errors. I propose a social-choice decision architecture based on the solution concept of a supermajority voting rule and derive its basic properties. In the model this supermajority voting rule attains the socially optimal cooperative solution, which is a new theoretical result around which the paper is built.
Weitzman's model is, as he admits, "heroically abstract," but he's hoping it might provide a good starting point of necessary discussions of options for a geoengineering governance regime. Even if we discount his proposed super-majority voting rule as either politically unrealistic (he uses the term "naive") or insufficient, his paper is, as usual, full of creative and useful ideas and insights, including his novel (to my mind anyway) concept of "free-driving" (e.g., overprovision of geoengineering) as a counterpart to the familiar "free-rider" problem (e.g., underprovision of climate change mitigation). If climate change is "mother of all externalities," Weitzman informs us, then geoengineering to avoid climate change catastrophes could prove, in the absence of an effective governance regime, to be the "father of all externalities."

Weitzman also usefully reminds us that what amounts to a pure public good for some people under some circumstances might amount to a pure public bad for other people under other circumstances. He provides a new term of art, "gob" (which I presume is an acronym for "good or bad") to describe such variable goods/bads. In a future world threatened by climate change, in which some countries might seek to use geoengineering on a unilateral basis, geoengineering becomes a "pure public gob."

Marty Weitzman is a wonderful mathematical modeler, but it's the consistently high quality and creativity of his thinking that are the real wonder.

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