Conference Agenda

This paper analyzes the role of carbon dioxide removal (CDR) and backstop technologies in transitioning to net-zero greenhouse gas emissions. We use a dynamic optimization approach with three carbon stocks – the resource stock, the atmospheric carbon stock, and carbon storage – to analyze the effect of temporary CDR in the presence of a backstop technology on resource consumption. Additionally, we consider multiple renewable atmospheric carbon stocks that decay at different rates. We find that when the resource is abundant and the CO2 stock in the atmosphere is low enough, the resource alone is used. This is followed by a phase of simultaneous use of the resource and the backstop. Meanwhile, the use of CDR increases rapidly during the in the first years and then converges to a pumping equilibrium in the steady state. The calibration reveals that the backstop plays a more important role in decarbonization than CDR. In a steady state, non-renewable resources are no longer extracted, and the backstop technology fully meets demand.

We study the optimal mitigation of CO2 emissions combined with the removal and storage of CO2 in an underground reservoir with leakage. The atmosphere consists of two virtual parts: A renewable and a non-renewable one. Although steady-state emissions converge to zero, we find that steady-state removal is positive and equal to the leaked emissions from the carbon storage. We analyze the comparative statics of the steady state with respect to decay, leakage, the discount rate, and the composition of the atmosphere. Furthermore, we analyze the dynamics of the optimal paths into the steady state using numerical simulations. We find that, while emissions converge monotonically to the steady state, the removal paths can be highly non-monotonic. In our calibrated model, integrating carbon dioxide removal partially substitutes emissions and results in a lower atmospheric carbon concentration, though, given current cost estimates, both effects are quantitatively relatively small.

We develop a global structural transformation integrated assessment model to study the impacts of climate change and mitigation policies on the sectoral reallocation of economic activity. The model integrates climate-economy interactions, sectoral heterogeneity in climate vulnerabilities and mitigation capabilities, and sectoral frictions. We show that climate damages generate large and uneven welfare losses and systematically slow structural transformation in low-income regions by trapping labor in agriculture and, in some cases, reversing service-sector expansion. Climate mitigation improves welfare relative to a damages-only scenario but shifts economic activity away from manufacturing and, in developing regions, toward agriculture, highlighting a tension between emissions reduction and development. Mobility frictions strongly mediate these effects: reducing labor and capital adjustment costs yields sizable welfare gains and accelerates structural transformation without significantly affecting emissions. Our results suggest that mobility-enhancing policies are critical complements to climate mitigation, helping align climate objectives with long-run development outcomes.

Climate tipping points are shifts in the climate system that could lock the world into a higher-temperature regime. Many tipping points are char-acterised by Knightian uncertainty, that is, it is difficult to assign prior probabilities to their occurrence. This paper examines the economic costs of this Knightian uncertainty. To do so, I first derive optimal abatement policies for different tipping point scenarios using an integrated assess-ment model that includes temperature feedback effects. Then, I develop and compute a tipping point uncertainty premium on the social cost of car-bon, as a function of different tipping point scenarios. I find that this premium on the social cost of carbon is between 12%-50% relative to complete-information scenarios. For tipping points triggered below 2.5◦ above pre-industrial levels, this uncertainty increases the social cost of carbon by between 20 and 40 US$ per tonne of carbon equivalent. Finally, I show that early discovery reduces the premium by 9%. This result illustrates that emission abatement policies in the coming decades are crucial in limiting tipping point risk, as early discovery might only offer moderate mitigation to the cost of uncertainty around tipping points.

This study introduces Tropical Forest Carbon Credit Capitalization (TFCCC), a contractual framework that keeps tropical forests publicly owned while granting private firms carbon credits and conservation responsibilities. By indexing lessees’ payoffs to verified deforestation outcomes, TFCCC reallocates monitoring and enforcement incentives to the private sector, addressing weak enforcement, funding volatility, and ambiguous land tenure. The analysis develops a dynamic equilibrium model calibrated to Brazilian Amazon data and finds that, in the baseline, TFCCC reduces deforestation in vulnerable areas from 15.11\% (no-policy benchmark) to 0.189\% per year, equivalent to 0.0161\% of total area, outperforming a TFFF-type benchmark. Further robustness checks show that, although TFCCC may not be attractive under some parameter settings compared to development, it delivers robust reductions in deforestation if adopted. In Monte Carlo analysis, the mean (median) proportional reduction relative to the no-policy benchmark is 95.44\% (98.91\%), with total deforestation below 0.1\% of the total area in most draws. Overall, TFCCC illustrates how performance-linked carbon leases can transform conservation from a fiscal burden into a scalable, self-financing institution that aligns public objectives with private incentives.

Sea-level rise and saltwater intrusion are growing risks for low-lying coastal regions. This study looks at how regional economies could adapt over time and what that means for the regional economy. We build a long-term regional economic model to examine how different nature-based adaptation measures can reduce the economic impacts of sea-level rise and increasing salinity. We use Zeeland as a case study region and focus on sectors that are most exposed in Zeeland, such as agriculture, industry, tourism, and transport and port-related activities. We compare a baseline path with no additional measures to several adaptation paths using nature-based measures. As well as a scenario in which farmers can switch to crops that better tolerate salty conditions.