Climate Change, Backstop Technology and Thanksgiving

There is a whole class of economic models of climate change that reach the conclusion that we can (and, indeed, should) wait with climate protection measures, and reduce greenhouse gas emissions slowly in presence. In the future (after some 20-30 years), when “optimal, efficient technologies” have been developed and we will be able to invest in climate protection at less cost – then we should engage heavily in mitigation of climate change (this approach is sometimes called the “climate policy ramp”). The most influential models of this class – William Nordhaus’s DICE and Richard Tol’s FUND – reach their conclusion as a consequence of two factors mainly: their discounting practice (which I wrote on recently), and the assumption that there exists a so-called backstop technology (a concept going back to… William Nordhaus). Meanwhile, there are reasons to fear that there make come a Thanksgiving for this technology optimism. Continue reading