Climate Change Adaptation and International Mitigation Agreements with Heterogeneous Countries

Global cooperation with respect to greenhouse gas emissions mitigation is contingent on finding common ground in addressing the problem of adaptation to climate change impacts. This paper uses a noncooperative game theory model to investigate the relationship between adaptation technology and the formation of emissions-reducing international environmental agreements (IEAs) on climate change, with countries that are heterogeneous with respect to the benefits and costs of both mitigation and adaptation. While differences in climate vulnerability are a deterrent for cooperation, increasing the effectiveness of adaptation in highly vulnerable countries can foster an IEA. Both traditional free riding on climate change mitigation efforts, and free riding on adaptation technology among members of an IEA can be reduced by transfers of adaptation technology within the IEA. A numerical example with parameters estimated from climate change data is used to simulate stable coalitions and demonstrate how the transfer of adaptation technology reduces free riding on an IEA.