Project Details
Projekt
Net Social Benefits of Carbon Dioxide Removal: Carbon Cycle Feedbacks and Strategic Advantages (CDRecon)
Applicant
Dr. Wilfried Rickels
Subject Area
Economic Theory
Economic Policy, Applied Economics
Economic Policy, Applied Economics
Term
from 2018 to 2022
Project identifier
Deutsche Forschungsgemeinschaft (DFG) - Project number 390288545
To maintain the chance of keeping the average global temperature increase below 2°C and to limit long-term climate change, removing carbon dioxide from the atmosphere (Carbon Dioxide Removal, CDR) and disposing of it in non-atmospheric carbon reservoirs is becoming increasingly necessary. Information on the social cost of carbon, i.e. measuring the cost of emitting carbon into the atmosphere, is not sufficient for assessing the social benefits of CDR because the social cost of non-atmospheric carbon reservoirs also needs to be taken into account. The social cost of removing carbon into the terrestrial biosphere (e.g., by afforestation) or the ocean (e.g. by spreading olivine in coastal areas) arises from carbon-cycle feedbacks and saturation effects, implying lower net social benefits of CDR than suggested by the saved (atmospheric) social cost of carbon. The present project, CDRecon, develops a new approach to an integrated assessment of CDR by combining dynamic economic modeling with earth system modeling to address two questions on Non-atmospheric Social Cost of CDR:1) What carbon cycle models are appropriate for integrated assessment of the net social benefits of CDR? 2) What is an appropriate scheme for assigning carbon credits to CDR? Neglecting non-atmospheric social cost results in inconsistent estimates with regard to the share and timing of CDR measures in climate policies. But climate policy is imperfect in reality anyway. Non-global coverage and non-cooperative behavior result in international carbon leakage and free-riding. In contrast to abatement and carbon capture and storage (CCS), CDR allows the removal of both, diffuse and past carbon emission from the atmosphere. Thus, CDR provides a number of unexplored strategic advantages in dealing with issues related to imperfect climate policies. Yet, if applied without accounting for the non-atmospheric social cost of carbon, it could also add a further dimension of imperfection. CDRecon will use and further develop methods of integrated assessment modeling (IAM), sensitivity analysis, forward-looking computable general equilibrium (CGE) models, differential game analysis, and (stochastic) dynamic optimization to address two further questions on Optimal and Non-optimal CDR in Climate Policies: 3) How is globally-coordinated climate policy affected by CDR?4) How is international carbon leakage and free-riding affected by CDR?CDRecon will study both, optimal and non-optimal CDR application, the latter arising from focusing only on the atmospheric social cost and neglecting carbon cycle feedbacks.
DFG Programme
Research Grants
International Connection
Netherlands
