External Publications
2021.12
Date: 02/06/2021

Adoption Gaps of Environmental Adaptation Technologies with Public Effects


Authors:

Angelo Antoci (Department of Economic and Business Sciences, University of Sassari); Simone Borghesi (Department of Political and International Sciences, University of Siena; Florence School of Regulation, European University Institute); Giulio Galdi (Florence School of Regulation, European University Institute); Sergio Vergalli (Department of Economics and Management, University of Brescia; Fondazione Eni Enrico Mattei)

Type: Open Access Journal
Published in: Environmental and Resource Economics (2021)
Keywords: Maladaptation, Mitigation, Externalities, Environmental Dumping

Abstract

As the Intergovernmental Panel on Climate Change (2018) testifies, the world is a long way from halting climate change, let alone reverting it. The existence of adaptation and mitigation technologies did not prove sufficient, their adoption being respectively faulted or hindered by the presence of externalities. In this work, we study how externalities, whether positive or negative, lead the system away from Pareto-dominant (social optimum) states, towards Pareto-dominated ones. We show that adoption gaps, i.e. differences between socially optimum vs current adoption shares, of both (mal)adaptation and mitigation technologies are caused by the externalities emitted. In particular, over-adoption may occur for maladaptive technologies, whereas under-adoption may occur in case of mitigation. We employ a model with two regions at different stages of development and also derive relevant considerations on possible counterproductive effects of green policies and environmental dumping.

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Adoption Gaps of Environmental Adaptation Technologies with Public Effects

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