Investment and Adaptation as Commitment Devices in Climate Politics
AbstractIt is well established that adaptation and technological investment in each case may serve as a commitment device in international climate politics. This paper for the first time analyzes the combined impact of these two strategic variables on global mitigation within a non-cooperative framework where countries either decide on mitigation before or after adaptation. By investment, which is assumed to be made in the fi rst place due to its considerable lead time, countries commit to lower national contributions to the global public good of mitigation. We fi nd that the sequencing of adaptation before mitigation reinforces this strategic effect of technological investments at least for sufficiently similar countries. As a consequence, the subgame-perfect equi- librium yields a globally lower level of mitigation, and higher global costs of climate change when adaptation is decided before mitigation. Besides this theoretical contribution, the paper proposes some strategies to combat the unfortunate rush to adaptation which can be currently observed in climate politics.
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Bibliographic InfoPaper provided by RECAP15, European University Viadrina, Frankfurt (Oder) in its series Discussion Paper Series RECAP15 with number 011.
Length: 24 pages
Date of creation: Oct 2013
Date of revision:
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adaptation; climate policy; investment; mitigation; non-cooperative behavior;
Other versions of this item:
- Heuson, Clemens & Peters, Wolfgang & Schwarze, Reimund & Topp, Anna-Katharina, 2013. "Investment and adaptation as commitment devices in climate politics," UFZ Discussion Papers 13/2013, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-10-18 (All new papers)
- NEP-ENE-2013-10-18 (Energy Economics)
- NEP-ENV-2013-10-18 (Environmental Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lecocq, Franck & Shalizi, Zmarak, 2007. "Balancing expenditures on mitigation of and adaptation to climate change : an exploration of Issues relevant to developing countries," Policy Research Working Paper Series 4299, The World Bank.
- Aggarwal, Rimjhim M. & Narayan, Tulika A., 2004. "Does inequality lead to greater efficiency in the use of local commons? The role of strategic investments in capacity," Journal of Environmental Economics and Management, Elsevier, vol. 47(1), pages 163-182, January.
- Ficre Zehaie, 2009. "The Timing and Strategic Role of Self-Protection," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 44(3), pages 337-350, November.
- Karen Pittel & Dirk Rübbelke, 2013. "Improving Global Public Goods Supply through Conditional Transfers - The International Adaptation Transfer Riddle," CESifo Working Paper Series 4106, CESifo Group Munich.
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