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Investment and Adaptation as Commitment Devices in Climate Politics

Clemens Heuson (), Wolfgang Peters, Reimund Schwarze and Anna-Katharina Topp

Environmental & Resource Economics, 2015, vol. 62, issue 4, 769-790

Abstract: The strategic roles of adaptation and technological investment in international climate politics have been analyzed within various approaches. What makes this paper unique is that we investigate the combined impact of adaptation and investment on global mitigation and we compare the subgame-perfect equilibria for different sequences of decisions. Considering a purely non-cooperative, game-theoretic framework, we find that by investment countries commit to lower national contributions to the global public good of mitigation. Moreover, the order of adaptation before mitigation might reinforce this strategic effect of technological investments. As a consequence, the subgame-perfect equilibrium for symmetric countries yields a globally lower level of mitigation, and higher global costs of climate change when countries engage in advanced adaptation. Besides this theoretical contribution, the paper proposes some strategies to combat the unfortunate ‘rush to adaptation’ which can be currently observed in climate politics. Copyright Springer Science+Business Media Dordrecht 2015

Keywords: Adaptation; Climate policy; Investment; Mitigation; Non-cooperative behavior; Q54; H41; H87; C72 (search for similar items in EconPapers)
Date: 2015
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Working Paper: Investment and Adaptation as Commitment Devices in Climate Politics (2013) Downloads
Working Paper: Investment and adaptation as commitment devices in climate politics (2013) Downloads
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DOI: 10.1007/s10640-015-9887-z

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