Suchergebnisse

Technological innovation is a key strategy for tackling environmental problems. The required R&D expenditures however are substantial and fall on self-interested countries. Thus, the prospects of successful innovation critically depend on innovation incentives. This paper focuses on a specific mechanism for strategic distortions in this R&D game. In this mechanism, the outlook of future conflicts surrounding technology deployment directly impacts on the willingness to undertake R&D. Apart from free-riding, a different deployment conflict with distortive effects on innovation may occur: Low deployment costs and heterogeneous preferences might give rise to 'free-driving'. In this recently considered possibility (Weitzman 2012), the country with the highest preference for technology deployment, the free-driver, may dominate the deployment outcome to the detriment of others. The present paper develops a simple two stage model for analyzing how technology deployment conflicts, free-riding and free-driving, shape R&D incentives of two asymmetric countries. The framework gives rise to rich findings, underpinning the narrative that future deployment conflicts pull forward to the R&D stage. While the outlook of free-riding unambiguously weakens innovation incentives, the findings for free-driving are more complex, including the possibility of super-optimal R&D and incentives for counter-R&D.

Epstein and Schneider (2007) develop a framework of learning under ambiguity, generalizing maxmin preferences of Gilboa and Schmeidler (1989) to intertemporal settings. The specific belief dynamics in Epstein and Schneider (2007) rely on the rejection of initial priors that have become implausible over the learning process. I demonstrate that this feature of ex-post rejection of theories gives rise to choices that are in sharp contradiction with ambiguity aversion. Concrete, the intertemporal maxmin decision-maker equipped with such belief dynamics prefers, under prevalent conditions, a bet in an ambiguous urn over the same bet in a risky urn. I offer two modifications of their framework, each of which is capable of avoiding this anomaly.

Climate interventions with solar geoengineering could reduce climate damages if deployed in a globally coordinated regime. In the absence of such a regime, however, strategic incentives of single actors might result in detrimental outcomes. A well-known concern is that a 'free-driver' (Weitzman, ML. A voting architecture for the governance of free-driver externalities, with application to geoengineering. Scand J Econ 2015;117:1049–68), the country with the strongest preference for cooling, might unilaterally set the global thermostat to its preferred level, thus imposing damages on others. Governance structures, i.e. more or less formal institutional arrangements between countries, could steer the decentralized geoengineering deployment towards the preferable global outcome. In this paper, we show that the coalition formation literature can make a valuable contribution to assessing the relative merit of different governance schemes. An important feature of the coalition formation literature is the sophisticated dynamic structure. A country pondering whether to leave a coalition anticipates that its departure could spark another process of disintegration among the remaining members of that coalition, which in turn may affect the assessment of whether leaving the coalition is worthwhile in the first place. This dynamic structure thus enables a more realistic picture of what coalitions are likely to form and remain stable. A second important feature of coalition formation models is wide control over the 'rules of the game', for instance, which agents need to consent to a transition from one coalitional arrangement to another. This control over the institutional setting allows consistently comparing and discussing various international governance arrangements. ; ISSN:2634-4068

The well-known Blackwell's theorem states the equivalence of statistical informativeness and economic valuableness. Celen (2012) generalizes this theorem, which is well-known for subjective expected utility (SEU), to maxmin expected utility (MEU) preferences. We demonstrate that the underlying definition of the value of information used in Celen (2012) is in contradiction with the principle of recursively defined utility. As a consequence, Celen's framework features dynamic inconsistency. Our main contribution consists in the definition of a value of information for MEU preferences that is compatible with recursive utility and thus respects dynamic consistency.

Solar radiation management (SRM) technologies are considered one of the likeliest forms of geoengineering. If developed, a future generation could deploy them to limit the damages caused by the atmospheric carbon stock inherited from the current generation, despite their negative side effects. Should the current generation develop these geoengi-neering capabilities for a future generation? And how would a decision to develop SRM impact on the current generation's abatement efforts? Natural scientists, ethicists, and other scholars argue that future generations could be more sanguine about the side effects of SRM deployment than the current generation. In this paper, we add economic rigor to this important debate on the intergenerational transfer of technological capabilities and pollution stocks. We identify three conjectures that constitute potentially rational courses of action for current society, including a ban on the development of SRM. How-ever, the same premises that underpin these conjectures also allow for a novel possibility: If the development of SRM capabilities is sufficiently cheap, the current generation may for reasons of intergenerational strategy decide not just to develop SRM technologies, but also to abate more than in the absence of SRM.

Decisions in the context of Climate Engineering (CE), the deliberate large-scale manipulation of the Earth's climate, are decisions made under uncertainty. CE options are associated with a broad range of environmental and societal risks that raise complex questions: How can the risks be assessed and evaluated when balanced against the risks of alternative strategies to counteract climate change? What are the strategic implications for climate politics against the background of insufficient scientific knowledge? Can we estimate the ethical implications of the risks involved for society? Uncertainties and risks represent a central aspect of the issue but cannot be reduced to the traditional technical orientation of risk terminologies. The article elaborates on the specific characteristics of the risks and uncertainties associated with CE technology from six different disciplinary viewpoints. It thereby seeks to reveal chances for a mutual enrichment of these individual viewpoints since each discipline experiences boundaries while examining the complex risks of CE. In this way, the article redefines disciplinary boundaries without entirely dissolving them and without disregarding the valuable contribution every individual viewpoint can make. This aim is realized by means of the identification of new approaches to central questions regarding the risks and uncertainties involved in CE that can only be addressed from an interdisciplinary perspective.