Adaptation, Mitigation and “Green” R&D to Combat Global Climate Change. Insights From an Empirical Integrated Assessment Exercise

This work develops a framework for the analysis at the macro-level of the relationship between adaptation and mitigation policies. The FEEM-RICE growth model with stock pollution, endogenous R&D investment and emission abatement is enriched with a planned-adaptation module where a defensive capital stock is built through adaptation investment. Within this framework the optimal path of planned adaptation, the optimal inter and intra temporal mix between adaptation, mitigation and investment in R&D, and the sensitivity of a strategy to each other is identified. The major conclusions of this research show that adaptation, mitigation and R&D are strategic complements as all concur together to the solution of the climate change problem; nonetheless the possibility to adapt reduces the need to mitigate and partly crowds out other forms of investment like those in R&D. The optimal intertemporal distribution of strategies is also described: it requires to anticipate mitigation effort that should start already when climate damages are low and postpone adaptation intervention until they are substantial. Thus the possibility to adapt is not a justification to delay abatement activities. A sensitivity analysis demonstrates the robustness of these results to different parameterizations, in particular to changes in expected climate-change damages and in the discount rates.


Issue Date:
2010-03
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/59746
Total Pages:
32
JEL Codes:
Q25; Q28
Series Statement:
SD
22.2010




 Record created 2017-04-01, last modified 2017-04-04

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