Accounting for adaptation and its effectiveness in International Environmental Agreements
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Accounting for adaptation and its effectiveness in International Environmental Agreements Francesco Furini1,3 · Francesco Bosello2,3,4,5 Received: 24 June 2020 / Accepted: 23 October 2020 © The Author(s) 2020
Abstract This paper analyses, within a standard International Environmental Agreement game, the effect of the introduction of adaptation on climate negotiation. The model expands the existing literature by considering a double relation between the two strategies. The common assumption that higher mitigation decreases the marginal benefit of adaptation and vice versa is enriched allowing for the possibility that mitigation, leading to lower and more manageable damages, determines a greater effectiveness of adaptive measures. We find the possibility for adaptation and mitigation to be strategic complements and not, as commonly believed, substitutes. Yet, as already known from the literature, the presence of adaptation can determine upward-sloping mitigation reaction functions regardless of the strategic relationship between mitigation and adaptation. When this is the case, the grand coalition can form. Nonetheless, large participation can induce substantive welfare gains only if adaptation and mitigation are strategic complements. Keywords Climate change · Adaptation effectiveness · Mitigation-adaptation strategic relation · International environmental agreements game
Electronic supplementary material The online version of this article (https://doi.org/10.1007/s10018- 020-00294-3) contains supplementary material, which is available to authorized users. * Francesco Furini francesco.furini@uni‑hamburg.de Francesco Bosello [email protected] 1
Department of Socioeconomics, Universität Hamburg, Hamburg, Germany
2
Department of Environmental Science and Policy, Università Statale Milano, Milan, Italy
3
Department of Environmental Sciences, Informatics and Statistics, Università Ca’ Foscari Venezia, Venice, Italy
4
Centro Euro-Mediterraneo sui Cambiamenti Climatici (CMCC), Venice, Italy
5
RFF-CMCC European Institute on Economics and the Environment (EIEE), Milan, Italy
13
Vol.:(0123456789)
Environmental Economics and Policy Studies
JEL Classification C71 · D62 · D74 · F53 · H41 · Q54
1 Introduction Combating climate change is increasingly recognized as one of the key challenges that our society has to address. The two pillars of climate change policy are mitigation and adaptation. The former acts directly on the cause of the problem, reducing emissions and lowering future climate change. The latter acts on its consequences tackling directly climate impacts. Recognizing the global public bad nature of climate change, the international community started since the beginning of the 90 s a complex negotiation process under the umbrella of the United Nation Framework Convention on Climate Change to set and coordinate an equitable, effective and efficient climate action. These negotiations rounds offered a natural and extremely fertile ground to apply game and coalition theory models. T
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