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Séminaire du CIRED

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Basak Bayramoglou, Michael Finus, Jean-François Jacques, "Climate coalitions in a mitigation-adaptation game"

We study the strategic interaction between mitigation and adaptation strategies in the canonical model of international environmental agreements (IEAs). We show that these two strategies are strategic substitutes considering various definitions of substitutability, irrespective of the degree of cooperation. Moreover, different from a pure mitigation game, adaptation may cause mitigation levels between different countries to be strategic complements, generalizing a result by Ebert and Welsch (2011 and 2012) to more than two countries with the possibility that players form self-enforcing IEAs. We systematically analyze under which conditions this leads to more positive cooperative outcomes compared to the pure mitigation game. Particular emphasis is placed on sufficient conditions for the existence, and uniqueness of interior equilibrium strategies and how they link to the success of coalition formation.

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