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Modeling Of Environmental Adaptation: Amenity Versus Productivity And Modernization

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  • NATALI HRITONENKO

    (Department of Mathematics, Prairie View A&M University, Prairie View, TX 77446-519, USA)

  • YURI YATSENKO

    (School of Business, Houston Baptist University, 7502 Fondren, Houston, TX 77074, USA)

Abstract

We develop an aggregated model to study rational environmental adaptation policies that compensate negative consequences of climate change. The model distinguishes three categories of adaptation measures that (a) compensate the decrease of environmental amenity value, (b) compensate the decrease of total productivity, (c) develop and introduce new hazard-protected capital and technology. We analyze the optimal balance among consumption, capital investment, and different categories of adaptation investments under exogenous climate change. It appears that the climate change damage and subsequent adaptation do not lead to a higher level of capital modernization in the long run as compared to the benchmark case with no climate change. A synergism between productivity-related and amenity-related adaptation activities arises because the productivity-related adaptation positively impacts the economy and creates better possibilities for the amenity adaptation.

Suggested Citation

  • Natali Hritonenko & Yuri Yatsenko, 2013. "Modeling Of Environmental Adaptation: Amenity Versus Productivity And Modernization," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 4(02), pages 1-24.
    • Handle: RePEc:wsi:ccexxx:v:04:y:2013:i:02:n:s2010007813500061
    DOI: 10.1142/S2010007813500061
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    References listed on IDEAS

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    1. Bosello, Francesco, 2010. "Adaptation, Mitigation and “Green” R&D to Combat Global Climate Change. Insights From an Empirical Integrated Assessment Exercise," Sustainable Development Papers 59746, Fondazione Eni Enrico Mattei (FEEM).
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    3. Stern,Nicholas, 2007. "The Economics of Climate Change," Cambridge Books, Cambridge University Press, number 9780521700801, October.
    4. Shardul Agrawala & Francesco Bosello & Carlo Carraro & Kelly De Bruin & Enrica De Cian & Rob Dellink & Elisa Lanzi, 2011. "Plan Or React? Analysis Of Adaptation Costs And Benefits Using Integrated Assessment Models," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 2(03), pages 175-208.
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    Cited by:

    1. Natali Hritonenko & Victoria Hritonenko & Yuri Yatsenko, 2020. "Games with Adaptation and Mitigation," Games, MDPI, vol. 11(4), pages 1-16, December.

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