Rational policymaking during a pandemic.

Policymaking during a pandemic can be extremely challenging. As COVID-19 is a new disease and its global impacts are unprecedented, decisions are taken in a highly uncertain, complex, and rapidly changing environment. In such a context, in which human lives and the economy are at stake, we argue that using ideas and constructs from modern decision theory, even informally, will make policymaking a more responsible and transparent process.

Solar geoengineering may lead to excessive cooling and high strategic uncertainty.

Climate engineering-the deliberate large-scale manipulation of the Earth's climate system-is a set of technologies for reducing climate-change impacts and risks. It is controversial and raises novel governance challenges [T. C. Schelling, Climatic Change, 33, 303-307 (1996); J. Virgoe, Climatic Change, 95, 103-119 (2008)]. We focus on the strategic implications of solar geoengineering. When countries engineer the climate, conflict can arise because different countries might prefer different temperatures. This would result in too much geoengineering: the country with the highest preference for geoengineering cools the planet beyond what is socially optimal at the expense of the others-a theoretical possibility termed "free-driving" [M. L. Weitzman, Scand. J. Econ., 117, 1049-1068 (2015)]. This study is an empirical test of this hypothesis. We carry out an economic laboratory experiment based on a public "good or bad" game. We find compelling evidence of free-driving: global geoengineering exceeds the socially efficient level and leads to welfare losses. We also evaluate the possibility of counteracting the geoengineering efforts of others. Results show that countergeoengineering generates high payoff inequality as well as heavy welfare losses, resulting from both strategic and behavioral factors. Finally, we compare strategic behavior in bilateral and multilateral settings. We find that welfare deteriorates even more under multilateralism when countergeoengineering is a possibility. These results have general implications for governing global good or bad commons.

A Satisficing Framework for Environmental Policy Under Model Uncertainty.

We propose a novel framework for the economic assessment of environmental policy. Our main point of departure from existing work is the adoption of a satisficing, as opposed to optimizing, modeling approach. Along these lines, we place primary emphasis on the extent to which different policies meet a set of goals at a specific future date instead of their performance vis-a-vis some intertemporal objective function. Consistent to the nature of environmental policymaking, our model takes explicit account of model uncertainty. To this end, the decision criterion we propose is an analog of the well-known success-probability criterion adapted to settings characterized by model uncertainty. We apply our criterion to the climate-change context and the probability distributions constructed by Drouet et al. (2015) linking carbon budgets to future consumption. Insights from computational geometry facilitate computations considerably and allow for the efficient application of the model in high-dimensional settings.

Expert judgments about RD&D and the future of nuclear energy.

Probabilistic estimates of the cost and performance of future nuclear energy systems under different scenarios of government research, development, and demonstration (RD&D) spending were obtained from 30 U.S. and 30 European nuclear technology experts. We used a novel elicitation approach which combined individual and group elicitation. With no change from current RD&D funding levels, experts on average expected current (Gen. III/III+) designs to be somewhat more expensive in 2030 than they were in 2010, and they expected the next generation of designs (Gen. IV) to be more expensive still as of 2030. Projected costs of proposed small modular reactors (SMRs) were similar to those of Gen. IV systems. The experts almost unanimously recommended large increases in government support for nuclear RD&D (generally 2-3 times current spending). The majority expected that such RD&D would have only a modest effect on cost, but would improve performance in other areas, such as safety, waste management, and uranium resource utilization. The U.S. and E.U. experts were in relative agreement regarding how government RD&D funds should be allocated, placing particular focus on very high temperature reactors, sodium-cooled fast reactors, fuels and materials, and fuel cycle technologies.

Faster or slower decarbonization? Policymaker and stakeholder expectations on the effect of the COVID-19 pandemic on the global energy transition.

The COVID-19 pandemic might have tremendous consequences on decarbonization efforts across the globe. Understanding governments' policy action in the short and medium term is key to assess whether the response to the crisis will crowd out or fast-track decarbonization efforts. We surveyed over 200 policymakers and stakeholders from 55 different countries to collect climate policy expectations in various sectors and regions in the next five years. While support for high-emitting sectors is not expected to dissolve completely, commitment to policies supporting the transition to low-carbon energy and transport sectors is expected to increase substantially. This is true for OECD and Asian countries, representing approximately 90% of global emissions. Our results suggest that expectations that the COVID-19 pandemic will accelerate decarbonization efforts are widely shared.