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Optimal Adaptation and Mitigation to Climate Change in Small Environmental Economies

Author

Listed:
  • Miller, Sebastián J.
  • Galiani, Sebastián
  • Chisari, Omar O.
Abstract
This paper compares the optimal dynamic choices between policies of mitigation and adaptation for three economies: Brazil, Chile and the United States. The focus is on the optimal role of mitigation and adaptation for "environmentally small economies", i. e. , economies that are witnessing an exogenous increase in emissions to which they are contributing very little. The simulations lead to three main conclusions. First, small economies should concentrate their environmental efforts, if any, on adaptation. This is not a recommendation that such economies indulge in free-riding. Instead, it is based on considerations of cost effectiveness, ceteris paribus. Second, small economies that are unable to spend enough on adaptation may end up spending less on mitigation owing to their impoverishment as a result of negative climate shocks. Third, higher mitigation expenditures may arise not only as a result of greater optimal adaptation expenditures, but also because of increased adaptation to the incentives for mitigation provided by richer countries.

Suggested Citation

  • Miller, Sebastián J. & Galiani, Sebastián & Chisari, Omar O., 2013. "Optimal Adaptation and Mitigation to Climate Change in Small Environmental Economies," IDB Publications (Working Papers) 4668, Inter-American Development Bank.
    • Handle: RePEc:idb:brikps:4668
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    References listed on IDEAS

    as
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    Cited by:

    1. Andrés C. ÁLVAREZ ESPINOSA & Silvia Liliana CALDERÓN & German David ROMERO & Daniel Alejandro ORDOÑEZ, 2014. "Análisis macroeconómico de los impactos sectoriales de cambio climático en Colombia," Archivos de Economía 12349, Departamento Nacional de Planeación.

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    More about this item

    Keywords

    IDB-WP-417;

    JEL classification:

    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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