Adaptation and Mitigation in Long-Term Climate Policies

Center for Operations Research and Econometrics Discussion Paper No. 2010/65

35 Pages Posted: 10 Apr 2011

See all articles by Thierry Bréchet

Thierry Bréchet

Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE)

Natalia Hritonenko

Prairie View A&M University

Yuri Yatsenko

Houston Baptist University

Date Written: October 8, 2010

Abstract

The paper analytically explores the optimal policy mix between mitigation and environmental adaptation against climate change at a macroeconomic level. The constructed economic-environmental model is formulated as a social planner problem with the adaptation and abatement investments as separate decision variables. The authors prove the existence of a unique steady state and provide a comparative static analysis of the optimal investment. It leads to essential implications for associated long-term environmental policies. In particular, the dependence of the optimal ratio between abatement and adaptation investments on economic efficiency appears to have an inverted U-shape. Data calibration and numerical simulation are provided to illustrate theoretical outcomes.

Keywords: environmental adaptation, mitigation, optimal investment, long-term climate policies

Suggested Citation

Brechet, Thierry and Hritonenko, Natalia and Yatsenko, Yuri, Adaptation and Mitigation in Long-Term Climate Policies (October 8, 2010). Center for Operations Research and Econometrics Discussion Paper No. 2010/65, Available at SSRN: https://ssrn.com/abstract=1805795 or http://dx.doi.org/10.2139/ssrn.1805795

Thierry Brechet

Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE) ( email )

34 Voie du Roman Pays
B-1348 Louvain-la-Neuve, b-1348
Belgium

Natalia Hritonenko

Prairie View A&M University ( email )

PO Box 188
Prairie View, TX 77446-0188
United States

Yuri Yatsenko (Contact Author)

Houston Baptist University ( email )

Houston, TX 77074-3298
United States

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