An adaptation-mitigation game: does adaptation promote participation in international environmental agreements?

This paper studies how the investment in adaptation can influence the participation in an international environmental agreement (IEA) when countries decide in adaptation before they choose emissions. Three types of agreements are studied, a mitigation agreement for which countries coordinate their decisions only on emissions; an adaptation agreement for which there is only coordination when countries decide their levels of adaptation and a complete agreement when there is coordination in both emissions and adaptation levels. In every case, we assume that the degree of effectiveness of adaptation is bounded from above, in order words, adaptation can alleviate the environmental problem, but it cannot solve it by itself leading the vulnerability of the country to almost zero. Our first results show that in our symmetric model where signatories select the same level of adaptation there are not signatory-signatory international externalities and the complete agreement coincides with the mitigation agreement, and moreover it does not matter when adaptation is chosen with respect to emissions. The main contribution of this paper is to show that the grand coalition could be stable for all types of agreement, but only for extremely high degrees of effectiveness of adaptation. If this condition is not satisfied, the model predicts low levels of membership. The standard result of three countries is found for the mitigation/complete agreement. For the adaptation agreement participation can be higher than three, but not higher than six countries. In any case, we can conclude that under reasonable values for the degree of effectiveness of adaptation, in our model adaptation does not promote participation in an IEA.