Is there room for geoengineering in the optimal climate policy mix?

We investigate geoengineering as a possible substitute for mitigation and adaptation measures to address climate change. Relying on an integrated assessment model, we distinguish between the effects of solar radiation management (SRM) on atmospheric temperature levels and its side-effects on the environment. The optimal climate portfolio is a mix of mitigation, adaptation, and SRM. When accounting for uncertainty in the magnitude of SRM side-effects and their persistency over time, we show that the SRM option lacks robustness. We then analyse the welfare consequences of basing the SRM decision on wrong assumptions about its side-effects, and show that total output losses are considerable and increase with the error horizon. This reinforces the need to balance the policy portfolio in favour of mitigation.