Optimal climate policy in 3D: mitigation, carbon removal, and solar geoengineering

We introduce solar geoengineering (SG) and carbon dioxide removal (CDR) into an integrated assessment model to analyze the trade-offs between mitigation, SG, and CDR. We propose a novel empirical parameterization of SG that disentangles its efficacy, calibrated with climate model results, from its direct impacts. We use a simple parameterization of CDR that decouples it from the scale of baseline emissions. We find that (a) SG optimally delays mitigation and lowers the use of CDR, which is distinct from moral hazard; (b) SG is deployed prior to CDR while CDR drives the phasing out of SG in the far future; (c) SG deployment in the short term is relatively independent of discounting and of the long-term trade-off between SG and CDR over time; (d) small amounts of SG sharply reduce the cost of meeting a 2°C target and the costs of climate change, even with a conservative calibration for the efficacy of SG.