Economics

The simplest economic metric for geoengineering is the cost of mitigation (COM), where mitigation of any kind is measured as an equivalent quantity of carbon removed from the atmosphere. Table 10.2 comprises a summary of COM for geoengineering computed in accord with the NAS92 methodology. The costs are highly uncertain. For albedo modification schemes additional uncertainty is introduced by the somewhat arbitrary conversion from albedo change to equivalent reduction in CO2, which depends on assumptions about the climate's sensitivity to increased CO2 and on the atmospheric lifetime of CO2. The estimated COM varies by more than two orders of magnitude between various geoengineering methods. It is noteworthy that, for some methods, particularly albedo modification the costs are very low compared to emissions abatement.15

In principle, the COM permits a direct comparison among geoengineering methods and between geoengineering and abatement. In practice, differences in the distribution of costs and benefits as well as the non-monetary aspects of

15 While they vary greatly, conventional economic models generally put the marginal COM between 100 and 500 $/tC for abatement beyond 50% of current emissions (Panel on Policy Implications of Greenhouse Warming, 1992; Watson, Zinyowera, et al., 1996).

Table 10.2 Summary comparison of geoengineering options

Geoengineering Method COM*

Injection of C02 into 50-150 the ocean.

Injection of C02 50-150 underground.

Ocean fertilization 3-10 with phosphate

Ocean fertilization with 1-10 iron

Intensive forestry to 10-100 capture carbon in harvested trees.

Technical Uncertainties

Costs are much better known than for other geoengineering schemes. Moderate uncertainty about fate of C02 in ocean.

Costs are known as for C02 in ocean; less uncertainty about geologic than oceanic storage.

Uncertain biology: can ecosystem change its P:N utilization ratio? Is there significant long-term carbon captive?

Uncertain biology: when is iron really limiting? Is there significant long-term carbon captive?

Uncertainty about rate of carbon accumulation, particularly under changing climatic conditions.

Risk of Side Effects

Low risk. Possibility of damage to local benthic community.

Low risk.

Moderate risk. Possible oxygen depletion may cause methane release. Changed mix of ocean biota.

Moderate risk. Possible oxygen depletion may cause methane release. Changed mix of ocean biota.

Low risk. Intensive cultivation will impact soils and biodiversity.

Non-technical Issues

Like abatement this scheme is local with costs associated with each source. Potential legal and political concerns over oceanic disposal.

Is geologic disposal of C02 geoengineering or a method of emissions abatement?

Legal concerns: Law of the Sea, Antarctic Treaty. Liability concerns arising from affect on fisheries; NB. fisheries might be improved. Legal concerns: Law of the Sea, Antarctic Treaty. Liability concerns arising from effect on fisheries; NB. fisheries might be improved Political questions: how to divide costs? Whose land is used?

Solar shields to generate 0.05-0.5 an increase in the Earth's albedo.

Stratospheric S02 to < 1 increase albedo by direct optical scattering.

Tropospheric S02 to < 1 increase albedo by direct and indirect effects.

Costs and technical feasibility are uncertain. Uncertainty dominated by launch costs.

Uncertain lifetime of stratospheric aerosols.

Substantial uncertainties regarding aerosol transport and its effect on cloud optical properties.

Low risk. However, albedo increase does not exactly counter the effect of increased C02.

High risk. Effect on ozone depletion uncertain. Albedo increase is not equivalent to C02 mitigation.

Moderate risk: unintentional mitigation of the effect of C02 already in progress.

Security, equity and liability if system used for weather control.

Liability: ozone destruction.

Liability and sovereignty because the distribution of tropospheric aerosols strongly effects regional climate.

Note:

* Cost of mitigation (COM) is in dollars per ton of C02 emissions mitigated. While based on current literature, the estimates of risk and cost are the author's alone.

geoengineering render such cost comparison largely irrelevant to real decisions about abatement.

Examination of the shape of the marginal COM functions provides an insightful comparison between geoengineering and abatement. Although the COM is uncertain, there is much less doubt about how the COM scales with the amount of mitigation required. First, consider conventional mitigation. Whereas econometric and technical methods for estimating the cost of moderate abatement differ, both agree that costs will rise steeply if we want to abate emissions by more than about 50% (between 100 and 500 $/tC). (Watson, Zinyowera et al., 1996). In sharp contrast, geoengineering the planetary albedo has marginal costs that, although highly uncertain, are roughly independent of, and probably decrease with, the amount of mitigation required.16 In particular, the COM for albedo modification will not rise steeply as one demands 100% abatement because the process of albedo modification has no intrinsic link to the scale of current anthropogenic climate forcing. One could, in principle, engineer an albedo increase several times larger than the equivalent anthropogenic forcing and thus cool the climate. These relationships are illustrated in Figure 10.4a.

Next, consider industrial carbon management (ICM) defined in the restrictive sense as including pre-emissions controls only (Section 10.2.2). For low levels of mitigation, the COM for ICM is higher than for conventional mitigation, but the marginal cost of carbon management is expected to rise more slowly. The addition of ICM to conventional mitigation is thus expected to substantially lower the cost of large emission reductions, as is shown schematically in Figure 10.4a. However, no matter how optimistically one assesses ICM technologies, the marginal COM will still rise steeply as one approaches 100% mitigation due to the difficulty of wringing the last high-marginal-cost emissions from the energy system.

Finally, consider geoengineering of CO2 by enhancement of biological sinks or by physical/chemical methods. As with albedo modification, there is no link to the scale of current anthropogenic emissions. Rather, each kind of sink will have its own intrinsic scale determined by the relevant biogeochemistry. Marginal COM for each sink will rise as one demands an amount of mitigation beyond its intrinsic scale. Figure 10.4b shows examples of plausible marginal cost functions.

Examination of the marginal COM functions illuminates the question of whether enhancement of biological carbon sinks is a form of geoengineering. Industrial carbon management is like conventional mitigation in that it is tied

16 While space-based albedo modification is much more expensive, both stratospheric and space based albedo modification have large initial fixed costs and likely decreasing marginal costs.

Conventional y mitigation

Conventional plus carbon management

Geoengineering albedo from space

Geoengineering albedo from space

0

Fraction of C02 emissions mitigated

100%

Sequestration in terrestrial /

Sequestration in

ecosystems /

oceanic ecosystems^^

Fraction of C02 emissions mitigated

100%

Figure 10.4 Schematic comparison between modes of mitigation. (a) Conventional mitigation means any method other than geoengineering or carbon management; e.g., conservation or use of non-fossil energy. The addition of carbon management lowers the cost of emissions mitigation, however, costs will still rise steeply as one tries to eliminate all emissions. Conversely, albedo modification from space has a very high initial capital costs, but can provide essentially unlimited effect low marginal cost. (b) Sequestration based on ecosystem modification will have costs that rise steeply at mitigation amount (carbon flux) set by the internal dynamics of the respective systems.

to the scale of anthropogenic emissions. In contrast, removal of CO2 from the atmosphere, either by enhancement of biological sinks or by other methods, is like geoengineering of albedo because as a countervailing measure it is independent of the scale of anthropogenic emissions.

Geoengineering might, in principle, be incorporated into integrated assessments of climate change as a fallback strategy that supplies an upper bound on the COM. In this context a fallback strategy must either be more certain of effect, faster to implement, or provide unlimited mitigation at fixed marginal cost. Various geoengineering schemes meet each of these criteria. The fallback strategy defined here for integrated assessment is a generalization of a backstop technology used in energy system modeling, where it denotes a technology that can supply unlimited energy at fixed (usually high) marginal cost. Fallback strategies will enter if climate change is more severe than we expect or if the COM is much larger than we expect (Keith and Dowlatabadi, 1992). The existence of a fallback strategy permits more confidence in adopting a moderate response to the climate problem: without fallback options a moderate response is risky given the possibility of a strong climatic response to moderate levels of fossil-fuel combustion.

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