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Adaptation and mitigation in long-term climate policies

Author

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  • Brechet, Thierry

    (Université catholique de Louvain, CORE and Chair Lhoist Berghmans in Environmental Economics and Management, B-1348 Louvain-la-Neuve, Belgium)

  • HRITONENKO, Natali

    (Department of Mathematics, Prairie View A&M University, Texas, USA)

  • YATSENKO, Yuri

    (Université catholique de Louvain, CORE and Chair Lhoist Berghmans in Environmental Economics and Management, B-1348 Louvain-la-Neuve, Belgium; School of Business, Houston Baptist University, Texas, USA)

Abstract

The paper analytically explores the optimal policy mix between mitigation and environmental adaptation against climate change at a macroeconomic level. The constructed economic- environmental model is formulated as a social planner problem with the adaptation and abatement investments as separate decision variables. The authors prove the existence of a unique steady state and provide a comparative static analysis of the optimal investment. It leads to essential implications for associated long-term environmental policies. In particular, the dependence of the optimal ratio between abatement and adaptation investments on economic efficiency appears to have an inverted U-shape. Data calibration and numerical simulation are provided to illustrate theoretical outcomes.

Suggested Citation

  • Brechet, Thierry & HRITONENKO, Natali & YATSENKO, Yuri, 2010. "Adaptation and mitigation in long-term climate policies," LIDAM Discussion Papers CORE 2010065, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2010065
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    File URL: https://sites.uclouvain.be/core/publications/coredp/coredp2010.html
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    References listed on IDEAS

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    Cited by:

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    2. Hassan Benchekroun & Farnaz Taherkhani, 2014. "Adaptation and the Allocation of Pollution Reduction Costs," Dynamic Games and Applications, Springer, vol. 4(1), pages 32-57, March.
    3. Martin Farnham & Peter Kennedy, 2015. "Adapting to Climate Change: Equilibrium Welfare Implications for Large and Small Economies," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 61(3), pages 345-363, July.
    4. Heuson, Clemens & Gawel, Erik & Gebhardt, Oliver & Hansjürgens, 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).
    5. Heuson, Clemens & Gawel, Erik & Gebhardt, Oliver & Hansjürgens, Bernd & Lehmann, Paul & Meyer, Volker & Schwarze, Reimund, 2012. "Ökonomische Grundfragen der Klimaanpassung: Umrisse eines neuen Forschungsprogramms," UFZ Reports 02/2012, Helmholtz Centre for Environmental Research (UFZ).
    6. HRITONENKO, Natali & YATSENKO, Yuri, 2011. "Sustainable growth and modernization under environmental hazard and adaptation," LIDAM Discussion Papers CORE 2011025, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

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