Give and take: How the funding of adaptation to climate change can improve the donor's terms-of-trade
Oliver Schenker and
Ecological Economics, 2014, vol. 106, issue C, 44-55
This paper discusses the interplay between international trade, regional adaptation to climate change and financial transfers for funding adaptation. It combines insights from a theoretical model of North-to-South transfers with the findings of a calibrated dynamic multi-region multi-sector computable general equilibrium model that takes into account the impacts of climate change and the adaptation to it. Assessing the effects of adaptation funding indicates that funding of adaptation in developing regions can be Pareto-improving. Not only will developing regions, which do not own sufficient resources for adapting optimally, profit from receiving adaptation funding. Terms-of-trade improvements in the high and middle income donor countries can dominate transfer costs and hence lead to a net-welfare gain in almost any developed region except North America. As such our consideration adds a new argument for financially supporting adaptation in the developing world besides the well-known ones such as fairness and incentives for participation in a global climate treaty.
Keywords: Funding of adaptation; Climate change; International trade; Dynamic multi-region multi-sector CGE model (search for similar items in EconPapers)
JEL-codes: C68 D58 F18 Q54 Q56 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:106:y:2014:i:c:p:44-55
Access Statistics for this article
Ecological Economics is currently edited by C. J. Cleveland
More articles in Ecological Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().