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Title (Primary) Investment and adaptation as commitment devices in climate politics
Author Heuson, C.; Peters, W.; Schwarze, R.; Topp, A.-K.
Journal Environmental & Resource Economics
Year 2015
Department OEKON
Volume 64
Issue 4
Page From 769
Page To 790
Language englisch
Keywords Adaptation; Climate policy; Investment; Mitigation; Non-cooperative behavior
UFZ wide themes RU6
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.
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Heuson, C., Peters, W., Schwarze, R., Topp, A.-K. (2015):
Investment and adaptation as commitment devices in climate politics
Environ. Resour. Econ. 64 (4), 769 - 790