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Adaptation and Mitigation in Global Pollution Problems: Economic Impacts of Productivity, Sensitivity, and Adaptive Capacity

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  • Udo Ebert
  • Heinz Welsch

Abstract

This paper studies the influence of productivity, pollution sensitivity, and adaptive capacity on optimal mitigation and adaptation in a two country global pollution model. We investigate the effects of changes of these parameters on the allocation of emissions, adaptation expenditures, and welfare. In our analysis we distinguish between cooperative and noncooperative behavior. Our findings imply that unilateral improvements in productivity and adaptive capacity have strategic significance and do not necessarily lead to mutual welfare improvements. They raise the emissions not only in the country where the technological improvement takes place, but also globally. An improvement in global welfare is guaranteed only under cooperative behavior with respect to emission and adaptation choices.
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Suggested Citation

  • Udo Ebert & Heinz Welsch, 2012. "Adaptation and Mitigation in Global Pollution Problems: Economic Impacts of Productivity, Sensitivity, and Adaptive Capacity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 52(1), pages 49-64, May.
    • Handle: RePEc:kap:enreec:v:52:y:2012:i:1:p:49-64
    DOI: 10.1007/s10640-011-9519-1
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    More about this item

    Keywords

    Global pollution; Adaptation; Mitigation; Cooperative behavior; Nash equilibrium; Comparative Statics; Q58; Q54;
    All these keywords.

    JEL classification:

    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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