Distinguishing morale hazard from moral hazard in geoengineering

Abstract

Geoengineering is the deliberate modification of the climate system. It has been discussed as a technique to counteract changes expected as a result of Anthropogenic Global Warming (AGW).1 Speculation has occurred that the possibility of geoengineering will reduce or delay efforts to mitigate AGW. This possible delay or reduction in mitigation has been described as ‘moral hazard’ by various authors. We investigate the definitions and use of the term ‘moral hazard’, and the related (but significantly different) concept of ‘morale hazard’, in relevant law, economic and insurance literatures. We find that ‘moral hazard’ has been generally misapplied in discussions of geoengineering, which perhaps explains unexpected difficulties in detecting expected effects experimentally.2 We clarify relevant usage of the terms, identifying scenarios that can properly be described as moral hazard (malfeasance), and morale hazard (lack of caution or recklessness). We note generally the importance of correctly applying this distinction when discussing geoengineering. In conclusion, we note that a proper consideration of the risks of both moral and morale hazards allows us to easily segment framings for both geoengineering advocacy and the advocate groups who rely on these framings. We suggest mnemonics for groups vulnerable to moral hazard (Business as Usuals) and morale hazard (Chicken Littles) and suggest the development of an experimental methodology for validating the distinction thus drawn.

Distributed governance of Solar Radiation Management geoengineering: A possible solution to SRM’s “free-driver” problem?

“…For example, changing population levels would attract a new allocationalthough these adjustments would ordinarily be gradual enough to effect only limited change, even on countries using their full cooling allowance. Using slow-changing variables (land area or population) to control SRM allocation reduces the influence of perverse incentives or moral hazard (Lockley and Coffman, 2016), which may conceivably exist if allocations are based on rapidly-varying factors, such as current emissions.…”

5. Trends and Patterns in Public Investment in Spain

“…As the 2018 IPCC's 1.5°C SR15 states: "increasing investment in physical and social infrastructure is a key enabling condition to enhance the resilience and the adaptive capacities of societies" (IPCC 2018, p. 19). Likewise, some climate activists are concerned that the prospect of remediation (particularly the tantalizing potential of negative emissions technologies) will discourage adequate investment in mitigation, or at least complacency about the need to meet the net zero targets (Lockley and Coffman 2016).…”

Carbon dioxide removal and the futures market

“…Two factors combine to increase market risks: 'selection pressure' , when only the most bullish firms attract investors and customers; and duplicitous behaviour from 'bad actors' . Managers and shareholders of firms providing CDR services on a futures contract may be either take reckless risks (morale hazard), or may wilfully sign contracts that are actively fraudulent (moral hazard)-having no intention to ever deliver on them [47]. These potential issues present major risks to the development of a healthy and functional market in CDR futures.…”