Engineering climate debt: temperature overshoot and peak-shaving as risky subprime mortgage lending

Despite the ambitious temperature goal of the 2015 Paris Agreement, the pace of reducing global CO₂ emissions remains sluggish. This creates conditions in which the idea of temperature ‘overshoot and peak-shaving’ is emerging as a possible strategy to meet the Paris goal. An overshoot and peak-shaving scenario rests upon the ‘temporary’ use of speculative solar radiation management (SRM) technologies combined with large-scale carbon dioxide removal (CDR). Whilst some view optimistically the strategic interdependence between SRM and CDR, we argue that this strategy comes with a risk of escalating ‘climate debt’. We explain our position using the logic of debt and the analogy of subprime mortgage lending. In overshoot and peak-shaving scenarios, the role of CDR and SRM is to compensate for delayed mitigation, placing the world in a double debt: ‘emissions debt’ and ‘temperature debt’. Analogously, this can be understood as a combination of ‘subprime mortgage’ (i.e. large-scale CDR) and ‘home-equity-line-of-credit’ (i.e. temporary SRM). With this analogy, we draw some important lessons from the 2007–2009 US subprime mortgage crisis. The analogy signals that the efficacy of temporary SRM cannot be evaluated in isolation of the feasibility of large-scale CDR and that the failure of the overshoot promise will lead to prolonged peak-shaving, masking an ever-rising climate debt. Overshoot and peak-shaving scenarios should not be presented as a secured feasible investment, but rather as a high-risk speculation betting on insecure promises. Obscuring the riskiness of such scenarios is a precipitous step towards escalating a climate debt crisis.

Key policy insights

• The slow progress of mitigation increases the attraction of an ‘overshoot and peak-shaving’ scenario which combines temporary SRM with large-scale CDR

• Following the logic of debt, the role of CDR and SRM in this scenario is to compensate for delayed mitigation, creating a double debt of CO₂ emissions and global temperature

• Using the analogy of subprime lending, this strategy can be seen as offering a combination of subprime mortgage and open-ended ‘line-of-credit’

• Because the ‘success’ of peak-shaving by temporary SRM hinges critically on the overshoot promise of large-scale CDR, SRM and CDR should not be discussed separately