IDEAS home Printed from https://ideas.repec.org/a/eee/ecolec/v173y2020ics092180091930789x.html
   My bibliography  Save this article

Climate change costs more than we think because people adapt less than we assume

Author

Listed:
  • Gawith, David
  • Hodge, Ian
  • Morgan, Fraser
  • Daigneault, Adam

Abstract

Human behaviour is commonly optimised in economic models of adaptation to climate change. These models assume that people work to maximise profit, subject to financial and technological limitations. In effect, these models simulate adaptive potential. In reality, adaptation falls short of this potential. This shortfall is conceptualised as the adaptation deficit, and it has been causing increasing concern.

Suggested Citation

  • Gawith, David & Hodge, Ian & Morgan, Fraser & Daigneault, Adam, 2020. "Climate change costs more than we think because people adapt less than we assume," Ecological Economics, Elsevier, vol. 173(C).
  • Handle: RePEc:eee:ecolec:v:173:y:2020:i:c:s092180091930789x
    DOI: 10.1016/j.ecolecon.2020.106636
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S092180091930789X
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.ecolecon.2020.106636?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 search for a different version of it.

    References listed on IDEAS

    as
    1. Samuel Fankhauser, 2009. "The costs of adaptation," GRI Working Papers 7, Grantham Research Institute on Climate Change and the Environment.
    2. Frances C. Moore & David B. Lobell, 2014. "Adaptation potential of European agriculture in response to climate change," Nature Climate Change, Nature, vol. 4(7), pages 610-614, July.
    3. Di Falco, Salvatore & Sharma, Sindra, 2018. "Investing in Climate Change Adaptation: Motivations and Green Incentives in the Fiji Islands," Ecological Economics, Elsevier, vol. 154(C), pages 394-408.
    4. Monge, Juan J. & Daigneault, Adam J. & Dowling, Leslie J. & Harrison, Duncan R. & Awatere, Shaun & Ausseil, Anne-Gaelle, 2018. "Implications of future climatic uncertainty on payments for forest ecosystem services: The case of the East Coast of New Zealand," Ecosystem Services, Elsevier, vol. 33(PB), pages 199-212.
    5. Lamperti, F. & Dosi, G. & Napoletano, M. & Roventini, A. & Sapio, A., 2018. "Faraway, So Close: Coupled Climate and Economic Dynamics in an Agent-based Integrated Assessment Model," Ecological Economics, Elsevier, vol. 150(C), pages 315-339.
    6. Sam Fankhauser, 2017. "Adaptation to Climate Change," Annual Review of Economics, Annual Reviews, vol. 9(1), pages 209-230, October.
    7. Fraser J. Morgan & Philip Brown & Adam J. Daigneault, 2015. "Simulation vs. Definition: Differing Approaches to Setting Probabilities for Agent Behaviour," Land, MDPI, vol. 4(4), pages 1-24, September.
    8. Debra Davidson, 2016. "Gaps in agricultural climate adaptation research," Nature Climate Change, Nature, vol. 6(5), pages 433-435, May.
    9. Iglesias, Ana & Garrote, Luis, 2015. "Adaptation strategies for agricultural water management under climate change in Europe," Agricultural Water Management, Elsevier, vol. 155(C), pages 113-124.
    10. Bisaro, Alexander & Roggero, Matteo & Villamayor-Tomas, Sergio, 2018. "Institutional Analysis in Climate Change Adaptation Research: A Systematic Literature Review," Ecological Economics, Elsevier, vol. 151(C), pages 34-43.
    11. Mario Andres Fernandez & Adam Daigneault, 2017. "Erosion mitigation in the Waikato District, New Zealand: economic implications for agriculture," Agricultural Economics, International Association of Agricultural Economists, vol. 48(3), pages 341-361, May.
    12. Thomas Berger & Christian Troost, 2014. "Agent-based Modelling of Climate Adaptation and Mitigation Options in Agriculture," Journal of Agricultural Economics, Wiley Blackwell, vol. 65(2), pages 323-348, June.
    13. Marshall Burke & Kyle Emerick, 2016. "Adaptation to Climate Change: Evidence from US Agriculture," American Economic Journal: Economic Policy, American Economic Association, vol. 8(3), pages 106-140, August.
    14. Müller-Hansen, Finn & Heitzig, Jobst & Donges, Jonathan F. & Cardoso, Manoel F. & Dalla-Nora, Eloi L. & Andrade, Pedro & Kurths, Jürgen & Thonicke, Kirsten, 2019. "Can Intensification of Cattle Ranching Reduce Deforestation in the Amazon? Insights From an Agent-based Social-Ecological Model," Ecological Economics, Elsevier, vol. 159(C), pages 198-211.
    15. Fankhauser, Samuel & McDermott, Thomas K. J., 2014. "Understanding the adaptation deficit: why are poor countries more vulnerable to climate events than rich countries?," LSE Research Online Documents on Economics 57620, London School of Economics and Political Science, LSE Library.
    16. Adam Daigneault & Suzie Greenhalgh & Oshadhi Samarasinghe, 2018. "Economic Impacts of Multiple Agro-Environmental Policies on New Zealand Land Use," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 69(4), pages 763-785, April.
    17. Elisabeth Gsottbauer & Jeroen Bergh, 2011. "Environmental Policy Theory Given Bounded Rationality and Other-regarding Preferences," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 49(2), pages 263-304, June.
    18. Ciarli, Tommaso & Savona, Maria, 2019. "Modelling the Evolution of Economic Structure and Climate Change: A Review," Ecological Economics, Elsevier, vol. 158(C), pages 51-64.
    19. Kelly de Bruin & Rob Dellink & Shardul Agrawala, 2009. "Economic Aspects of Adaptation to Climate Change: Integrated Assessment Modelling of Adaptation Costs and Benefits," OECD Environment Working Papers 6, OECD Publishing.
    20. Hope, Chris & Anderson, John & Wenman, Paul, 1993. "Policy analysis of the greenhouse effect : An application of the PAGE model," Energy Policy, Elsevier, vol. 21(3), pages 327-338, March.
    21. Adam Daigneault & Suzie Greenhalgh & Oshadhi Samarasinghe, 2014. "A response to Doole and Marsh ([Doole, G., 2013]) article: methodological limitations in the evaluation of policies to reduce nitrate leaching from New Zealand agriculture," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 58(2), pages 281-290, April.
    22. Klaus Eisenack & Susanne C. Moser & Esther Hoffmann & Richard J. T. Klein & Christoph Oberlack & Anna Pechan & Maja Rotter & Catrien J. A. M. Termeer, 2014. "Explaining and overcoming barriers to climate change adaptation," Nature Climate Change, Nature, vol. 4(10), pages 867-872, October.
    23. 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.
    24. James Nolan & Dawn Parker & G. Cornelis Van Kooten & Thomas Berger, 2009. "An Overview of Computational Modeling in Agricultural and Resource Economics," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 57(4), pages 417-429, December.
    25. Nordhagen, Stella & Pascual, Unai, 2013. "The Impact of Climate Shocks on Seed Purchase Decisions in Malawi: Implications for Climate Change Adaptation," World Development, Elsevier, vol. 43(C), pages 238-251.
    26. Martin Parry & Jason Lowe & Clair Hanson, 2009. "Overshoot, adapt and recover," Nature, Nature, vol. 458(7242), pages 1102-1103, April.
    27. Daigneault, Adam J. & Morgan, Fraser, 2012. "Estimating Impacts of Climate Change Policy on Land Use: An Agent Based Modeling Approach," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124973, Agricultural and Applied Economics Association.
    28. Jan C. Thiele & Winfried Kurth & Volker Grimm, 2014. "Facilitating Parameter Estimation and Sensitivity Analysis of Agent-Based Models: A Cookbook Using NetLogo and 'R'," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 17(3), pages 1-11.
    29. Ekholm, Tommi, 2018. "Climatic Cost-benefit Analysis Under Uncertainty and Learning on Climate Sensitivity and Damages," Ecological Economics, Elsevier, vol. 154(C), pages 99-106.
    30. W Neil Adger & Jon Barnett, 2009. "Four Reasons for Concern about Adaptation to Climate Change," Environment and Planning A, , vol. 41(12), pages 2800-2805, December.
    31. Daigneault, Adam & Greenhalgh, Suzie & Samarasinghe, Oshadhi, 2014. "A response to Doole and Marsh (2013) article: methodological limitations in the evaluation of policies to reduce nitrate leaching from New Zealand agriculture," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 58(2), April.
    32. Sam Fankhauser, 2017. "Adaptation to Climate Change," Annual Review of Resource Economics, Annual Reviews, vol. 9(1), pages 209-230, October.
    33. 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.
    34. Graeme J. Doole & Dan K. Marsh, 2014. "Methodological limitations in the evaluation of policies to reduce nitrate leaching from New Zealand agriculture," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 58(1), pages 78-89, January.
    35. Fraser J Morgan & Adam J Daigneault, 2015. "Estimating Impacts of Climate Change Policy on Land Use: An Agent-Based Modelling Approach," PLOS ONE, Public Library of Science, vol. 10(5), pages 1-20, May.
    36. Grimm, Volker & Berger, Uta & DeAngelis, Donald L. & Polhill, J. Gary & Giske, Jarl & Railsback, Steven F., 2010. "The ODD protocol: A review and first update," Ecological Modelling, Elsevier, vol. 221(23), pages 2760-2768.
    37. Jager, W. & Janssen, M. A. & De Vries, H. J. M. & De Greef, J. & Vlek, C. A. J., 2000. "Behaviour in commons dilemmas: Homo economicus and Homo psychologicus in an ecological-economic model," Ecological Economics, Elsevier, vol. 35(3), pages 357-379, December.
    38. Fankhauser, Samuel, 2009. "The costs of adaptation," LSE Research Online Documents on Economics 37610, London School of Economics and Political Science, LSE Library.
    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. Emediegwu, Lotanna E. & Ubabukoh, Chisom L., 2023. "Re-examining the impact of annual weather fluctuations on global livestock production," Ecological Economics, Elsevier, vol. 204(PA).
    2. Grace B. Villamor & Andrew Dunningham & Philip Stahlmann-Brown & Peter W. Clinton, 2022. "Improving the Representation of Climate Change Adaptation Behaviour in New Zealand’s Forest Growing Sector," Land, MDPI, vol. 11(3), pages 1-18, March.
    3. Mutlu, Asli & Roy, Debraj & Filatova, Tatiana, 2023. "Capitalized value of evolving flood risks discount and nature-based solution premiums on property prices," Ecological Economics, Elsevier, vol. 205(C).
    4. Alessandro Taberna & Tatiana Filatova & Andrea Roventini & Francesco Lamperti, 2021. "Coping with increasing tides: technological change, agglomeration dynamics and climate hazards in an agent-based evolutionary model," LEM Papers Series 2021/44, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    5. Guifang Liu & Jie Li & Liang Ren & Heli Lu & Jingcao Wang & Yaxing Zhang & Cheng Zhang & Chuanrong Zhang, 2022. "Identification of Socio-Economic Impacts as the Main Drivers of Carbon Stocks in China’s Tropical Rainforests: Implications for REDD+," IJERPH, MDPI, vol. 19(22), pages 1-20, November.
    6. Taberna, Alessandro & Filatova, Tatiana & Roventini, Andrea & Lamperti, Francesco, 2022. "Coping with increasing tides: Evolving agglomeration dynamics and technological change under exacerbating hazards," Ecological Economics, Elsevier, vol. 202(C).

    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. Fraser J. Morgan & Philip Brown & Adam J. Daigneault, 2015. "Simulation vs. Definition: Differing Approaches to Setting Probabilities for Agent Behaviour," Land, MDPI, vol. 4(4), pages 1-24, September.
    2. Robert Huber & Hang Xiong & Kevin Keller & Robert Finger, 2022. "Bridging behavioural factors and standard bio‐economic modelling in an agent‐based modelling framework," Journal of Agricultural Economics, Wiley Blackwell, vol. 73(1), pages 35-63, February.
    3. Utomo, Dhanan Sarwo & Onggo, Bhakti Stephan & Eldridge, Stephen, 2018. "Applications of agent-based modelling and simulation in the agri-food supply chains," European Journal of Operational Research, Elsevier, vol. 269(3), pages 794-805.
    4. Rianne Duinen & Tatiana Filatova & Wander Jager & Anne Veen, 2016. "Going beyond perfect rationality: drought risk, economic choices and the influence of social networks," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 57(2), pages 335-369, November.
    5. Troost, Christian & Huber, Robert & Bell, Andrew R. & van Delden, Hedwig & Filatova, Tatiana & Le, Quang Bao & Lippe, Melvin & Niamir, Leila & Polhill, J. Gareth & Sun, Zhanli & Berger, Thomas, 2023. "How to keep it adequate: A protocol for ensuring validity in agent-based simulation," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 159, pages 1-21.
    6. Ran Sun & James Nolan & Suren Kulshreshtha, 2022. "Agent-based modeling of policy induced agri-environmental technology adoption," SN Business & Economics, Springer, vol. 2(8), pages 1-26, August.
    7. Ji, Xinde & Cobourn, Kelly M. & Weng, Weizhe, 2018. "The Effect of Climate Change on Irrigated Agriculture: Water-Temperature Interactions and Adaptation in the Western U.S," 2018 Annual Meeting, August 5-7, Washington, D.C. 274306, Agricultural and Applied Economics Association.
    8. Coronese, Matteo & Occelli, Martina & Lamperti, Francesco & Roventini, Andrea, 2023. "AgriLOVE: Agriculture, land-use and technical change in an evolutionary, agent-based model," Ecological Economics, Elsevier, vol. 208(C).
    9. Juan C. Ciscar & Daniele Paci & Lucia Vergano, 2010. "Issues on the Economics of Adaptation to Climate Change," Chapters, in: Emilio Cerdá Tena & Xavier Labandeira (ed.), Climate Change Policies, chapter 3, Edward Elgar Publishing.
    10. Huber, Robert & Bakker, Martha & Balmann, Alfons & Berger, Thomas & Bithell, Mike & Brown, Calum & Grêt-Regamey, Adrienne & Xiong, Hang & Le, Quang Bao & Mack, Gabriele & Meyfroidt, Patrick & Millingt, 2018. "Representation of decision-making in European agricultural agent-based models," Agricultural Systems, Elsevier, vol. 167(C), pages 143-160.
    11. Fraser J Morgan & Adam J Daigneault, 2015. "Estimating Impacts of Climate Change Policy on Land Use: An Agent-Based Modelling Approach," PLOS ONE, Public Library of Science, vol. 10(5), pages 1-20, May.
    12. Doole, Graeme J. & Marsh, Dan K., 2014. "Use of positive mathematical programming invalidates the application of the NZFARM model: Response to Daigneault et al. (2014)," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 58(2), April.
    13. Xun Su & Minpeng Chen, 2022. "Econometric Approaches That Consider Farmers’ Adaptation in Estimating the Impacts of Climate Change on Agriculture: A Review," Sustainability, MDPI, vol. 14(21), pages 1-23, October.
    14. Taraz, Vis, 2018. "Can farmers adapt to higher temperatures? Evidence from India," World Development, Elsevier, vol. 112(C), pages 205-219.
    15. Heidi K. Edmonds & C. A. Knox Lovell & Julie E. Lovell, 2022. "The Inequities of National Adaptation to Climate Change," Resources, MDPI, vol. 12(1), pages 1-26, December.
    16. Kremmydas, Dimitris & Athanasiadis, Ioannis N. & Rozakis, Stelios, 2018. "A review of Agent Based Modeling for agricultural policy evaluation," Agricultural Systems, Elsevier, vol. 164(C), pages 95-106.
    17. Sandy Dall'Erba & Zhangliang Chen & Noé J. Nava, 2021. "U.S. Interstate Trade Will Mitigate the Negative Impact of Climate Change on Crop Profit," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(5), pages 1720-1741, October.
    18. Patrice Dumas & Minh Ha-Duong, 2013. "Optimal growth with adaptation to climate change," Climatic Change, Springer, vol. 117(4), pages 691-710, April.
    19. Charles Sims & Sarah E. Null & Josue Medellin-Azuara & Augustina Odame, 2021. "Hurry Up Or Wait: Are Private Investments In Climate Change Adaptation Delayed?," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 12(04), pages 1-36, November.
    20. Pierre Mérel & Matthew Gammans, 2021. "Climate Econometrics: Can the Panel Approach Account for Long‐Run Adaptation?," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(4), pages 1207-1238, August.

    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:eee:ecolec:v:173:y:2020:i:c:s092180091930789x. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolecon .

    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.