Working Paper: NBER ID: w18622
Authors: Martin Weitzman
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.
Keywords: geoengineering; climate change; public goods; voting mechanism
JEL Codes: Q5; Q54
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| supermajority voting rule (D72) | socially optimal solution (D61) |
| absence of governance (H11) | unilateral geoengineering actions (Q54) |
| unilateral geoengineering actions (Q54) | overprovision and significant risks (G33) |
| governance structure (G38) | mitigate risks of unilateral actions (D74) |
| governance of geoengineering (G38) | prevent adverse effects of unilateral actions (J65) |