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Adaptation, mitigation and risk: An analytic approach

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  • Zemel, Amos

Abstract

The adaptation vs. mitigation dilemma is considered by analyzing a simple dynamic model of managing a polluting process subject to the risk of abrupt occurrences of harmful events. The occurrence hazard can be mitigated by reducing the polluting emissions, while the occurrence damage can be controlled via investments in adaptation activities. A full dynamic characterization of the optimal mitigation/adaptation processes is presented. The adaptation and mitigation policies interact strongly, and the evolution in time of each is affected by the option to implement the other. The conditions under which adaptation investments should begin promptly, take place after some delay or be avoided altogether are derived in terms of some key model parameters.

Suggested Citation

  • Zemel, Amos, 2015. "Adaptation, mitigation and risk: An analytic approach," Journal of Economic Dynamics and Control, Elsevier, vol. 51(C), pages 133-147.
  • Handle: RePEc:eee:dyncon:v:51:y:2015:i:c:p:133-147
    DOI: 10.1016/j.jedc.2014.10.001
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    References listed on IDEAS

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    Cited by:

    1. Hiroaki Sakamoto & Masako Ikefuji & Jan R. Magnus, 2020. "Adaptation for Mitigation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 75(3), pages 457-484, March.
    2. Habla, Wolfgang & Roeder, Kerstin, 2017. "The political economy of mitigation and adaptation," European Economic Review, Elsevier, vol. 92(C), pages 239-257.
    3. Alain Ayong Le Kama & Aude Pommeret, 2017. "Supplementing Domestic Mitigation and Adaptation with Emissions Reduction Abroad to Face Climate Change," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(4), pages 875-891, December.
    4. Raveh, Ohad & Tsur, Yacov, 2020. "Resource windfalls and public debt: A political economy perspective," European Economic Review, Elsevier, vol. 123(C).
    5. Can Askan Mavi, 2017. "What Can Abrupt Events Tell Us About Sustainability ?," Working Papers hal-01628682, HAL.
    6. Mavi, Can Askan, 2019. "What can catastrophic events tell us about sustainability?," Journal of Mathematical Economics, Elsevier, vol. 83(C), pages 70-83.
    7. Müller-Fürstenberger, Georg & Schumacher, Ingmar, 2015. "Insurance and climate-driven extreme events," Journal of Economic Dynamics and Control, Elsevier, vol. 54(C), pages 59-73.
    8. Can Askan Mavi, 2019. "Can harmful events be another source of environmental traps?," CEE-M Working Papers halshs-02141789, CEE-M, Universtiy of Montpellier, CNRS, INRA, Montpellier SupAgro.
    9. Can Askan Mavi, 2017. "Can a hazardous event be another source of poverty traps ?," Working Papers hal-01522087, HAL.
    10. Vale, Petterson Molina, 2016. "The changing climate of climate change economics," Ecological Economics, Elsevier, vol. 121(C), pages 12-19.
    11. Long, Ngo Van & Prieur, Fabien & Tidball, Mabel & Puzon, Klarizze, 2017. "Piecewise closed-loop equilibria in differential games with regime switching strategies," Journal of Economic Dynamics and Control, Elsevier, vol. 76(C), pages 264-284.
    12. Can Askan Mavi, 2017. "Can a hazardous event be another source of poverty traps ?," Working Papers 2017.14, FAERE - French Association of Environmental and Resource Economists.
    13. Tsur, Yacov & Zemel, Amos, 2016. "Policy tradeoffs under risk of abrupt climate change," Journal of Economic Behavior & Organization, Elsevier, vol. 132(PB), pages 46-55.
    14. Finnoff, David & Horan, Richard D. & Shogren, Jason F. & Reeling, Carson & Berry, Kevin, 2016. "Natural vs anthropogenic risk reduction: Facing invasion risks involving multi-stable outcomes," Journal of Economic Behavior & Organization, Elsevier, vol. 132(PB), pages 113-123.
    15. Ingmar Schumacher, 2019. "Climate Policy Must Favour Mitigation Over Adaptation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(4), pages 1519-1531, December.
    16. 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.
    17. Can Askan Mavi, 2017. "Creative Destruction vs Destructive Destruction ? : A Schumpeterian Approach for Adaptation and Mitigation," Working Papers halshs-01455297, HAL.
    18. Berry, Kevin & Finnoff, David, 2016. "Choosing between adaptation and prevention with an increasing probability of a pandemic," Journal of Economic Behavior & Organization, Elsevier, vol. 132(PB), pages 177-192.
    19. Ohad Raveh & Yacov Tsur, 2017. "Political Myopia, Public Debt, and Economic Growth," OxCarre Working Papers 200, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
    20. Can Askan Mavi, 2019. "Can harmful events be another source of environmental traps?," Working Papers halshs-02141789, HAL.

    More about this item

    Keywords

    Optimal management; Abrupt damage; Occurrence hazard; Adaptation; Mitigation;

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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