A Critical Examination of the Climate Engineering Moral Hazard and Risk Compensation Concern

The Anthropocene Review 2 (2015) 174-191

18 Pages Posted: 8 Sep 2014 Last revised: 13 May 2018

See all articles by Jesse L Reynolds

Jesse L Reynolds

University of California, Los Angeles School of Law; Utrecht Centre for Water, Oceans and Sustainability Law, Utrecht University School of Law

Date Written: September 5, 2014

Abstract

The widespread concern that research into and potential implementation of climate engineering would reduce mitigation and adaptation is critically examined. First, empirical evidence of such moral hazard or risk compensation in general is inconclusive, and the empirical evidence to date in the case of climate engineering indicates that the reverse may occur. Second, basic economics of substitutes shows that reducing mitigation in response to climate engineering implementation could provide net benefits to humans and the environment, and that climate engineering might theoretically increase mitigation through strong income effects. Third, existing policies strive to promote other technologies and measures, including climate adaptation, which induce analogous risk-compensating behaviours. If the goal of climate policy is to minimize climate risks, this concern should not be grounds for restricting or prohibiting climate engineering research. Three potential means for this concern to manifest in genuinely deleterious ways, as well as policy options to reduce these effects, are identified.

Keywords: climate change, global warming, mitigation, climate engineering, geoengineering, moral hazard, risk compensation, climate economics

Suggested Citation

Reynolds, Jesse L, A Critical Examination of the Climate Engineering Moral Hazard and Risk Compensation Concern (September 5, 2014). The Anthropocene Review 2 (2015) 174-191, Available at SSRN: https://ssrn.com/abstract=2492708 or http://dx.doi.org/10.2139/ssrn.2492708

Jesse L Reynolds (Contact Author)

University of California, Los Angeles School of Law ( email )

385 Charles E. Young Dr. East
Room 1242
Los Angeles, CA 90095-1476
United States

Utrecht Centre for Water, Oceans and Sustainability Law, Utrecht University School of Law ( email )

3508 TC Utrecht
Utrecht
Netherlands

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