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M. Eigruber:
"EAERE 2021";
Talk: 26th Annual Scientific Conference of the European Association of Environmental and Resource Economists, Berlin/Online (invited); 2021-06-23 - 2021-06-26.

We apply the shallow lake system of M aler et al. (2003) to study an asymmetric transboundary pollution game with a tipping point and an option to geoengineer the climate. Non-cooperative outcomes as well as outcomes under full cooperation are analyzed. We identify areas in parameter space for which countries' preferences towards the long run outcome diverge. Both the cooperative as well as the non cooperative systems are likely to exhibit multiple steady states in the relevant parameter region. The non-cooperative setup resembles a dynamic battle of the sexes game, where coordination, or pre-game commitments, have to be followed. Once climate engineering technologies are su ciently e ective, the temptation to endure a catastrophe increases. But lock-in at high temperature levels is especially problematic in case of irreversible damage due to global warming, which also implies alarming consequences in regards to the termination effect.

Global warming, Externalities, Regime Shift, Asymmetric Di erential Game, Climate Engineering, Natural Disasters and their Management