Adaptation to Climate Change and International Mitigation Agreements with Heterogeneous Countries

Hongxiu Li () and Horatiu Rus

No 1408, Working Papers from University of Waterloo, Department of Economics

Abstract: This paper investigates the impact of adaptation on a country's incentive to participate in emission-reducing International Environmental Agreements (IEAs) on climate change. We develop a framework where heterogeneity across countries is introduced with respect to the benefits and costs of both mitigation of emissions and adaptation to reduce the impact of climate change. The paper uses two coalition stability concepts and numerical simulations to look at stable coalitions. We also study the effect of an within-coalition increase in the efficiency of adaptation on emissions and on countries' incentives to cooperate. Our main findings are: first, investment in adaptation technology has a public good feature inside the coalition, compared to being strictly a private good in the non-cooperation case. Second, a large coalition cannot be achieved if countries differ much in terms of vulnerability. Third, cooperation incentives can be enhanced by a coalition which diffuses technological progress on climate change adaptation among its members.

JEL-codes: H41 Q54 Q59 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2014-10, Revised 2014-10
New Economics Papers: this item is included in nep-agr, nep-cdm, nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:wat:wpaper:1408

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