IDEAS home Printed from https://ideas.repec.org/a/spr/climat/v117y2013i4p691-710.html
   My bibliography  Save this article

Optimal growth with adaptation to climate change

Author

Listed:
  • Patrice Dumas
  • Minh Ha-Duong

Abstract

We find that approximately a quarter of the world’s productive capital could be sensitive to climate; therefore, this capital faces the risk of accelerated obsolescence in a world warming by an average of 0.2 °C per decade. We examine the question of optimal adaptation to climate change in a vintage capital growth model without uncertainty. Along the optimal pathway, adaptation is proactive with an anticipation period of approximately twenty years. While there is additional investment in this scenario compared with a no-climate-change baseline, the overall cost to adapt is low relative to the potential losses from maladaptation. Over-investment in protection capital allows the economy to be consistently well-adapted to climate; thus, such a policy prevents transient maladaptation costs. Sensitivity analysis with an integrated assessment model suggests that costs could be ten times larger if adaptation only begins after vulnerable sectors are impacted. Copyright Springer Science+Business Media Dordrecht 2013

Suggested Citation

  • Patrice Dumas & Minh Ha-Duong, 2013. "Optimal growth with adaptation to climate change," Climatic Change, Springer, vol. 117(4), pages 691-710, April.
    • Handle: RePEc:spr:climat:v:117:y:2013:i:4:p:691-710
    DOI: 10.1007/s10584-012-0601-7
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s10584-012-0601-7
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10584-012-0601-7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Fankhauser, Samuel & Smith, Joel B. & Tol, Richard S. J., 1999. "Weathering climate change: some simple rules to guide adaptation decisions," Ecological Economics, Elsevier, vol. 30(1), pages 67-78, July.
    2. Samuel Fankhauser, 2010. "The costs of adaptation," Wiley Interdisciplinary Reviews: Climate Change, John Wiley & Sons, vol. 1(1), pages 23-30, January.
    3. Kelly, David L. & Kolstad, Charles D. & Mitchell, Glenn T., 2005. "Adjustment costs from environmental change," Journal of Environmental Economics and Management, Elsevier, vol. 50(3), pages 468-495, November.
    4. Stéphane Hallegatte, 2005. "The time scales of the climate-economy feedback and the climatic cost of growth," Post-Print hal-00716720, HAL.
    5. John Reilly & David Schimmelpfennig, 2000. "Irreversibility, Uncertainty, and Learning: Portraits of Adaptation to Long-Term Climate Change," Climatic Change, Springer, vol. 45(1), pages 253-278, April.
    6. Sebastian Kopf & Minh Ha-Duong & Stéphane Hallegatte, 2008. "Using Maps of City Analogues to Display and Interpret Climate Change scenarios and their uncertainty," Working Papers hal-00866436, HAL.
    7. World Bank, 2010. "Economics of Adaptation to Climate Change : Synthesis Report," World Bank Publications - Reports 12750, The World Bank Group.
    8. Benhabib, Jess & Rustichini, Aldo, 1991. "Vintage capital, investment, and growth," Journal of Economic Theory, Elsevier, vol. 55(2), pages 323-339, December.
    9. Stéphane Hallegatte, 2005. "The long time scales of the climate–economy feedback and the climatic cost of growth," Post-Print halshs-00008707, HAL.
    10. Barry Smit & Ian Burton & Richard Klein & J. Wandel, 2000. "An Anatomy of Adaptation to Climate Change and Variability," Climatic Change, Springer, vol. 45(1), pages 223-251, April.
    11. Stephen Schneider & William Easterling & Linda Mearns, 2000. "Adaptation: Sensitivity to Natural Variability, Agent Assumptions and Dynamic Climate Changes," Climatic Change, Springer, vol. 45(1), pages 203-221, April.
    12. -, 2009. "The economics of climate change," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 38679, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Duan, Hongbo & Zhang, Gupeng & Wang, Shouyang & Fan, Ying, 2019. "Integrated benefit-cost analysis of China's optimal adaptation and targeted mitigation," Ecological Economics, Elsevier, vol. 160(C), pages 76-86.
    2. Hongbo Duan & Gupeng Zhang & Shouyang Wang & Ying Fan, 2018. "Balancing China’s climate damage risk against emission control costs," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 23(3), pages 387-403, March.
    3. Kimberley Anh Thomas, 2023. "Compelled to Compete: Rendering Climate Change Vulnerability Investable," Development and Change, International Institute of Social Studies, vol. 54(2), pages 223-250, March.
    4. Heuson, Clemens & Gawel, Erik & Gebhardt, Oliver & Hansjürgens, Bernd & Lehmann, Paul & Meyer, Volker & Schwarze, Reimund, 2012. "Fundamental questions on the economics of climate adaptation: Outlines of a new research programme," UFZ Reports 05/2012, Helmholtz Centre for Environmental Research (UFZ).
    5. Tyler Felgenhauer & Mort Webster, 2014. "Modeling adaptation as a flow and stock decision with mitigation," Climatic Change, Springer, vol. 122(4), pages 665-679, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Heuson, Clemens & Gawel, Erik & Gebhardt, Oliver & Hansjürgens, Bernd & Lehmann, Paul & Meyer, Volker & Schwarze, Reimund, 2012. "Ökonomische Grundfragen der Klimaanpassung: Umrisse eines neuen Forschungsprogramms," UFZ Reports 02/2012, Helmholtz Centre for Environmental Research (UFZ).
    2. Heuson, Clemens & Gawel, Erik & Gebhardt, Oliver & Hansjürgens, Bernd & Lehmann, Paul & Meyer, Volker & Schwarze, Reimund, 2012. "Fundamental questions on the economics of climate adaptation: Outlines of a new research programme," UFZ Reports 05/2012, Helmholtz Centre for Environmental Research (UFZ).
    3. Arun S. Malik & Stephen C. Smith, 2012. "Adaptation To Climate Change In Low-Income Countries: Lessons From Current Research And Needs From Future Research," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 3(02), pages 1-22.
    4. McCarl, Bruce A. & Attavanich, Witsanu & Musumba, Mark & Mu, Jianhong E. & Aisabokhae, Ruth, 2011. "Land Use and Climate Change," MPRA Paper 83993, University Library of Munich, Germany, revised 2014.
    5. Oberlack, Christoph & Neumärker, Bernhard, 2013. "A diagnostic approach to the institutional analysis of climate adaptation," The Constitutional Economics Network Working Papers 01-2013, University of Freiburg, Department of Economic Policy and Constitutional Economic Theory.
    6. Antony Millner, 2012. "Climate prediction for adaptation: Who needs what?," Climatic Change, Springer, vol. 110(1), pages 143-167, January.
    7. Thierry Bréchet & Natali Hritonenko & Yuri Yatsenko, 2013. "Adaptation and Mitigation in Long-term Climate Policy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 55(2), pages 217-243, June.
    8. Sara Trærup & Jean Stephan, 2015. "Technologies for adaptation to climate change. Examples from the agricultural and water sectors in Lebanon," Climatic Change, Springer, vol. 131(3), pages 435-449, August.
    9. Ingham, Alan & Ma, Jie & Ulph, Alistair, 2007. "Climate change, mitigation and adaptation with uncertainty and learning," Energy Policy, Elsevier, vol. 35(11), pages 5354-5369, November.
    10. Paul Watkiss, 2015. "A review of the economics of adaptation and climate-resilient development," GRI Working Papers 205, Grantham Research Institute on Climate Change and the Environment.
    11. Barr, Rhona F. & Fankhauser, Samuel & Hamilton, Kirk, 2010. "The allocation of adaptation funding," LSE Research Online Documents on Economics 30161, London School of Economics and Political Science, LSE Library.
    12. Carlo Carraro & Francesco Bosello & Enrica De Cian, 2009. "An Analysis of Adaptation as a Response to Climate Change," Working Papers 2009_26, Department of Economics, University of Venice "Ca' Foscari".
    13. repec:gwi:wpaper:2012-08 is not listed on IDEAS
    14. Hirte, Georg & Nitzsche, Eric & Tscharaktschiew, Stefan, 2018. "Optimal adaptation in cities," Land Use Policy, Elsevier, vol. 73(C), pages 147-169.
    15. Richard S J Tol, 2018. "The Economic Impacts of Climate Change," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 12(1), pages 4-25.
    16. HRITONENKO, Natali & YATSENKO, Yuri, 2011. "Sustainable growth and modernization under environmental hazard and adaptation," LIDAM Discussion Papers CORE 2011025, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    17. Marco Letta & Richard S. J. Tol, 2019. "Weather, Climate and Total Factor Productivity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(1), pages 283-305, May.
    18. Rhona Barr & Samuel Fankhauser & Kirk Hamilton, 2010. "Adaptation investments: a resource allocation framework," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 15(8), pages 843-858, December.
    19. Kelly, David L. & Kolstad, Charles D. & Mitchell, Glenn T., 2005. "Adjustment costs from environmental change," Journal of Environmental Economics and Management, Elsevier, vol. 50(3), pages 468-495, November.
    20. Oberlack, Christoph & Neumärker, Bernhard, 2011. "Economics, institutions and adaptation to climate change," The Constitutional Economics Network Working Papers 04-2011, University of Freiburg, Department of Economic Policy and Constitutional Economic Theory.
    21. Altvater, Susanne & de Block, Debora & Bouwma, Irene & Dworak, Thomas & Frelih-Larsen, Ana & Görlach, Benjamin & Hermeling, Claudia & Klostermann, Judith & König, Martin & Leitner, Markus & Marinova, , 2012. "Adaptation measures in the EU: Policies, costs, and economic assessment. "Climate Proofing" of key EU policies," ZEW Expertises, ZEW - Leibniz Centre for European Economic Research, number 110558.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:climat:v:117:y:2013:i:4:p:691-710. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.