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Climate Agreements in a Mitigation-Adaptation Game

Author

Listed:
  • 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)

Abstract

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.

Suggested Citation

  • Basak Bayramoglu & Michael Finus & Jean-François Jacques, 2016. "Climate Agreements in a Mitigation-Adaptation Game," Working Papers 2016.17, FAERE - French Association of Environmental and Resource Economists.
    • Handle: RePEc:fae:wpaper:2016.17
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    Cited by:

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    2. Basak Bayramoglu & Jean-François Jacques & Sylvaine Poret, 2023. "Nutrition and Climate Policies in the European Union: Friends or Enemies?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 86(4), pages 807-849, December.
    3. Rubio, Santiago J., 2018. "Self-Enforcing International Environmental Agreements: Adaptation and Complementarity," ETA: Economic Theory and Applications 276179, Fondazione Eni Enrico Mattei (FEEM).
    4. Karp, Larry & Sakamoto, Hiroaki, 2021. "Sober optimism and the formation of international environmental agreements," Journal of Economic Theory, Elsevier, vol. 197(C).
    5. Thomas Eichner & Rüdiger Pethig, 2022. "International Environmental Agreements When Countries Behave Morally," CESifo Working Paper Series 10090, CESifo.
    6. Francois Bareille & Matteo Zavalloni & Meri Raggi & Davide Viaggi, 2021. "Cooperative Management of Ecosystem Services: Coalition Formation, Landscape Structure and Policies," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 79(2), pages 323-356, June.
    7. 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.
    8. Paul Cox & Stan Cox, 2020. "Adaptation and Mitigation amid the Consequences of Failure," American Journal of Economics and Sociology, Wiley Blackwell, vol. 79(3), pages 651-693, May.
    9. 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.
    10. 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.
    11. Effrosyni Diamantoudi & Eftichios S. Sartzetakis & Stefania Strantza, 2023. "Climate Coalitions and their Persistent Ineffectiveness," Discussion Paper Series 2023_04, Department of Economics, University of Macedonia, revised Apr 2023.
    12. Ralph Winkler, 2023. "On the Relationship between Adaptation and Mitigation," CESifo Working Paper Series 10371, CESifo.
    13. Michael Finus & Francesco Furini & Anna Viktoria Rohrer, 2021. "International Environmental Agreements and the Paradox of Cooperation: Revisiting and Generalizing Some Previous Results," Graz Economics Papers 2021-05, University of Graz, Department of Economics.
    14. 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.
    15. 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).
    16. 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.
    17. 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.
    18. Angel Prieto, 2019. "Alliances de villes pour le climat - Modélisation par la théorie des jeux," CIRANO Working Papers 2019s-16, CIRANO.
    19. Achim Hagen & Pierre von Mouche & Hans-Peter Weikard, 2020. "The Two-Stage Game Approach to Coalition Formation: Where We Stand and Ways to Go," Games, MDPI, vol. 11(1), pages 1-31, January.
    20. Eichner, Thomas & Schopf, Mark, 2021. "Pledge and Review Bargaining in Environmental Agreements: Kyoto vs. Paris," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242450, Verein für Socialpolitik / German Economic Association.
    21. Natali Hritonenko & Victoria Hritonenko & Yuri Yatsenko, 2020. "Games with Adaptation and Mitigation," Games, MDPI, vol. 11(4), pages 1-16, December.

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    More about this item

    Keywords

    Climate Change; Mitigation-Adaptation Game; Public Good Agreements; Strategic Substitutes versus Complements;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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