Our economics of climate change currently focus on climate policy strategies robust under climate response and climate impact uncertainty with a focus on mitigation options. We currently also ask whether solar radiation management would act as complement of or substitute for mitigation, and develop risk-based metrics accordingly.
Decision under uncertainty in the climate context is characterized by heterogeneous uncertainty, i.e. advanced knowledge about the costs of mitigation and global mean temperature response, and much less certain knowledge about global warming impacts and the side effects of solar radiation management.
We develop and apply decision-analytic concepts that would reflect that heterogeneity. For this we combine the advantages of cost benefit analysis and target-based approaches such as the 2° target and explore the properties of the thereby defined new decision analytic tool cost risk analysis. Hereby investment decisions regarding climate policy options represent the crucial and time-dependent decision variables.
When assuming the value system enshrined in the 2° target, current applications along those lines are
(i) the value of climate information,
(ii) consequences of delayed participation in a global climate treaty for the energy sector,
(iii) cost-efficient integrated mitigation and solar radiation management scenarios respecting the environmental standards of the 2° target.
For the latter we ask in particular, what deviations from those environmental standards would be unavoidable if solar radiation management were to become a significant contribution to a climate policy portfolio, e.g. due to a delay in mitigation policy.
In joining forces with our group on agro-economics, our research unit also tackles a series of both more applied and more regional topics:
(i) How could land use change under an anticipatory adaptation and mitigation in Europe?
(ii) What are limits of adaptation of regions prone to warming-induced shifts in precipitation margins?
(iii) By what tools of climate policy could mitigation and preservation of rain forests be simultaneously triggered?
In the mid-term, FNU strives at combined climate- and agro-economic scenarios to tackle trade-offs of mitigation and biodiversity policy.