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International Cooperation on Climate Change Adaptation from an Economic Perspective

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Author Info

  • Kelly C. de Bruin

    (Environmental Economics and Natural Resources Group Wageningen University)

  • Rob B. Dellink

    (Environmental Economics and Natural Resources Group, Wageningen University)

  • Richard S.J. Tol

    (Institute for Environmental Studies, Vrije Universiteit Economic and Social Research Institute, and Department of Spatial Economics, Vrije Universiteit)

Abstract

This paper investigates the economic incentives of countries to cooperate on international adaptation financing. Adaptation is generally implicitly incorporated in the climate change damage functions as used in Integrated Assessment Models. We replace the implicit decision on adaptation with explicit adaptation in a multi-regional setting by using an adjusted RICE model. We show that making adaptation explicit will not affect the optimal mitigation path when adaptation is set at its optimal level. Sub-optimal adaptation will, however, change the optimal mitigation path. Furthermore this paper studies for different forms of cooperation what effects international adaptation transfers will have on (i) domestic adaptation and (ii) the optimal mitigation path. Adaptation transfers will fully crowd out domestic adaptation in a first best setting. Transfers will decrease overall mitigation in our numerical simulations. An analytical framework is used to analyse the most important mechanisms and a numerical model is used to assess the magnitude of effects.

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Bibliographic Info

Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2010.63.

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Date of creation: May 2010
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Handle: RePEc:fem:femwpa:2010.63

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Related research

Keywords: Climate Change; Adaptation Funding; Integrated Assessment Modeling;

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  1. Frances Ruane & Xiaoheng Zhang, 2007. "Location Choices of the Pharmaceutical Industry in Europe after 1992," The Institute for International Integration Studies Discussion Paper Series iiisdp220, IIIS.
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Cited by:
  1. Heuson, Clemens & Gawel, Erik & Gebhardt, Oliver & Hansj├╝rgens, 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).

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