Incentives for international cooperation on adaptation and mitigation

Abstract

This chapter introduces a methodology used to incorporate adaptation as an explicit decision variable into an integrated assessment modelling framework. Applying this to the RICE model, the AD-RICE model is created. In the AD-RICE model, the adaptation costs and benefits are summarised in the form of adaptation cost curves. The chapter describes in detail how these curves are calibrated on empirical data. The AD-RICE model is then used to investigate various cooperation scenarios: a Nash scenario where all regions act in their own self interest, a climate cooperation scenario where regions aim to minimise the differences in regional climate change costs and the full cooperation scenario where regions aim to minimise the regional differences in income. The optimal mitigation paths are very different for the different forms of cooperation. Furthermore the effects of discounting and adaptation transfers (an adaptation fund) are studied, which depend strongly on the form of cooperation used.