On the strategic interaction between mitigation and adaptation/ Seraina Buob

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The thesis first examines the strategic interaction between mitigation and adaptation using a game-theoretic framework. Chapter 2 explores a non-cooperative scenario with symmetric regions, considering mitigation and adaptation as perfect substitutes for climate impact protection. It introduces a sequential decision-making process where mitigation occurs first, with its benefits realized in the future. If adaptation costs decrease with global mitigation and regions have higher incomes, they invest in both strategies. Conversely, poorer regions focus solely on mitigation. Recognizing the limitations of the symmetry assumption, the analysis in Chapter 2 is expanded to include asymmetric regions. Here, an industrialized region not exposed to climate change invests only in adaptation, while the developing region contributes to mitigation. If the industrialized region faces climate risks, the mitigation burden shifts to it. The second part of the thesis addresses the incentives for adaptation funding in developing countries. Chapter 4 analyzes a two-stage non-cooperative game where the industrialized country decides on adaptation funding first, followed by simultaneous mitigation decisions. It finds that funding is incentivized only if it shifts the mitigation burden, potentially harming the developing country’s welfare. Chapter 5 broadens this analysis, examining various decision-making sequences regarding adaptation funding, conf