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Climate Agreements in a Mitigation-Adaptation Game

Listed author(s):
  • Basak Bayramoglu

    ()

    (Economie Publique, INRA, AgroParisTech, Université Paris-Saclay)

  • Michael Finus

    ()

    (Department of Economics, University of Bath)

  • Jean-François Jacques

    ()

    (Université Paris-Est, ERUDITE, and LEDa-CGEMP, Université Paris-Dauphine)

We study the strategic interaction between mitigation (public good) and adaptation (private good) strategies in a climate agreement. We show that these two strategies are strategic substitutes considering various definitions of substitutability. Moreover, adaptation may cause mitigation levels between different countries to be no longer strategic substitutes but complements. We analyze under which conditions this leads to more succesful self-enforcing agreements. We argue that our results extend to many important externality problems involving public goods.

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File URL: http://faere.fr/pub/WorkingPapers/Bayramoglu_Finus_Jacques_FAERE_WP2016.17.pdf
File Function: First version, 2016
Download Restriction: no

Paper provided by FAERE - French Association of Environmental and Resource Economists in its series Working Papers with number 2016.17.

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Length: 55 pages
Date of creation: May 2016
Handle: RePEc:fae:wpaper:2016.17
Contact details of provider: Web page: http://www.faere.fr

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