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Adaptation to Climate Change: How does Heterogeneity in Adaptation Costs Affect Climate Coalitions?

Author

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  • Itziar Lazkano
  • Walid Marrouch
  • Bruno Nkuiya

Abstract

Adaptation costs to climate change vary widely across countries, especially between developed and developing countries. Adaptation costs also influence a country's decision to abate and join international environmental agreements (IEAs). In this paper, the authors study how these cost differences affect participation incentives. Their model identifies two channels through which adaptation affects free-riding incentives: carbon leakage and cost asymmetry in adaptation. In contrast with the common view, the authors find that the presence of adaptation is not necessarily an impediment to cooperation on abatement. They also present conditions under which adaptation can strengthen or weaken free-riding incentives. The results serve as a cautionary tale to policy makers and suggest that policies directed at reducing carbon leakage and/or cost differences between developed and developing countries may also affect the success and failure of IEAs.
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Suggested Citation

  • Itziar Lazkano & Walid Marrouch & Bruno Nkuiya, 2014. "Adaptation to Climate Change: How does Heterogeneity in Adaptation Costs Affect Climate Coalitions?," CIRANO Working Papers 2014s-29, CIRANO.
  • Handle: RePEc:cir:cirwor:2014s-29
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    References listed on IDEAS

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    Cited by:

    1. Michèle Breton & Lucia Sbragia, 2019. "The Impact of Adaptation on the Stability of International Environmental Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(2), pages 697-725, October.
    2. Miguel Borrero & Santiago J. Rubio, 2022. "An adaptation-mitigation game: does adaptation promote participation in international environmental agreements?," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 22(3), pages 439-479, September.
    3. Bayramoglu, Basak & Finus, Michael & Jacques, Jean-François, 2018. "Climate agreements in a mitigation-adaptation game," Journal of Public Economics, Elsevier, vol. 165(C), pages 101-113.
    4. Katharina Schüller & Kateřina Staňková & Frank Thuijsman, 2017. "Game Theory of Pollution: National Policies and Their International Effects," Games, MDPI, vol. 8(3), pages 1-15, July.
    5. Nkuiya, Bruno, 2020. "Stability of international environmental agreements under isoelastic utility," Resource and Energy Economics, Elsevier, vol. 59(C).
    6. Francesco Furini & Francesco Bosello, 2021. "Accounting for adaptation and its effectiveness in International Environmental Agreements," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 23(2), pages 467-493, April.
    7. Finus, Michael & Furini, Francesco & Rohrer, Anna Viktoria, 2021. "The efficacy of international environmental agreements when adaptation matters: Nash-Cournot vs Stackelberg leadership," Journal of Environmental Economics and Management, Elsevier, vol. 109(C).
    8. Nahid Masoudi & Georges Zaccour, 2018. "Adaptation and International Environmental Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(1), pages 1-21, September.
    9. Masoudi, Nahid & Zaccour, Georges, 2017. "Adapting to climate change: Is cooperation good for the environment?," Economics Letters, Elsevier, vol. 153(C), pages 1-5.
    10. Juan Moreno-Cruz & Anthony Harding, 2022. "A Unifying Theory of Foreign Intervention in Domestic Climate Policy," CESifo Working Paper Series 10172, CESifo.
    11. Santiago J. Rubio, 2018. "Self-Enforcing International Environmental Agreements: Adaptation and Complementarity," Working Papers 2018.29, Fondazione Eni Enrico Mattei.
    12. Hongxiu Li & Horatiu A. Rus, 2014. "Adaptation to Climate Change and International Mitigation Agreements with Heterogeneous Countries," Working Papers 1408, University of Waterloo, Department of Economics, revised Oct 2014.
    13. Michael Finus & Francesco Furini, 2022. "Global Climate Governance in the Light of Geoengineering: A Shot in the Dark?," Graz Economics Papers 2022-02, University of Graz, Department of Economics.
    14. Mukherjee Vivekananda & Rübbelke Dirk & Stahlke Theresa & Brumme Anja, 2022. "Allocation of Adaptation Aid: A Normative Theory," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 242(4), pages 471-499, August.
    15. Natali Hritonenko & Victoria Hritonenko & Yuri Yatsenko, 2020. "Games with Adaptation and Mitigation," Games, MDPI, vol. 11(4), pages 1-16, December.
    16. David M. McEvoy & Tobias Haller & Esther Blanco, 2022. "The Role of Non-Binding Pledges in Social Dilemmas with Mitigation and Adaptation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 81(4), pages 685-710, April.
    17. Awudu Abdulai, 2018. "Simon Brand Memorial Address," Agrekon, Taylor & Francis Journals, vol. 57(1), pages 28-39, January.
    18. Moreno-Cruz, Juan & Harding, Anthony, 2023. "A Unifying Theory of Foreign Intervention in Domestic Climate Policy," RFF Working Paper Series 23-24, Resources for the Future.

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    More about this item

    Keywords

    adaptation; environmental agreements; cost differences; carbon leakage;
    All these keywords.

    JEL classification:

    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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