Can Solar Radiation Management Reduce Economic Inequality? Insights from a Coupled Climate–Economy Model

As the world struggles to limit emissions, Solar Radiation Management (SRM) has been proposed as a potential climate intervention. However, its implications for economic inequality and broader socioeconomic outcomes remain uncertain. To explore these questions, we used the coupled climate-economy model NorESM2-DIAM to simulate an idealised SRM experiment. NorESM2 is an Earth system model, while DIAM is a cost-benefit integrated assessment model using perfect foresight. The two models exchange temperature and CO2 emissions annually at a 1x1-degree resolution: temperatures from NorESM2 are passed to DIAM, where they affect economic productivity and the economic agents’ decisions. In DIAM, the agents make decisions about savings and energy use based on temperature, the current economic situation, and their expectations for the future. The resulting CO2 emissions are passed back to NorESM2.

In the experiment, we reduced solar insolation by 1% from 2030 onward, at which point the economic agents adjusted their expectations to account for SRM. The results suggest that SRM reduces economic inequality compared to no intervention. However, this outcome is accompanied by higher CO₂ emissions, which imply additional environmental and societal risks.

While this is an idealised experiment, it demonstrates potential trade-offs between geoengineering and socioeconomic outcomes. The high spatial resolution of the model offers future potential to assess regional inequalities and other distributional outcomes in greater detail. In addition, we plan to explore more realistic SRM scenarios and add additional climate–economy interactions.