FEEM working papers "Note di lavoro"
2019.014
Date: 20/6/2019

Adoption Gaps of Environmental Adaptation Technologies with Public Effects


Authors:
Angelo Antoci (University of Sassari); Simone Borghesi (University of Siena, European University Institute); Giulio Galdi (University of Siena); Sergio Vergalli (Fondazione Eni Enrico Mattei, University of Brescia)
JEL n.: C70, D62, O13, O40, Q20
Keywords: Adaptation, Negative Externalities, Evolutionary Dynamics, Public Good Game, Environmental Dumping

Abstract

The global nature of the climatic challenge requires a high level of cooperation among agents, especially since most of the related coping strategies produce some kind of externalities toward others. Whether they are positive or negative, the presence of externalities may lead the system towards Pareto-dominated states. In this work, we study under and over-adoption of environmental adaptation technologies which enhance environmental quality for the individual while transferring externalities to other agents. We distinguish adaptation technologies between maladaptation and mitigation ones, depending on the sign of the externalities. In particular, we show that overadoption may occur for maladaptive technologies, whereas under-adoption may occur in case of mitigation. We study a model with two regions at different stages of development, which allows us to draw considerations on well-being consequences of environmental dumping.

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Suggested citation: Antoci, A., S. Borghesi, G. Galdi, S. Vergalli (2019), 'Adoption Gaps of Environmental Adaptation Technologies with Public Effects', Nota di Lavoro 14.2019, Milano, Italy: Fondazione Eni Enrico Mattei.

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