Solar Geoengineering Governance: A Dynamic Framework of Farsighted Coalition Formation

Abstract

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 2015), 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 (an excellent summary is Ray & Vohra 2015) 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.