Abstract:The aim of this speech is to introduce a theoretical model to quantitatively compare the two major approaches against climate change: mitigation and adaptation, taking into account the effects of market interactions. We show that in a two-port setting, a port’s mitigation strategy and adaptation strategy both have a positive impact on its own output. However, a port’s adaptation strategy has a negative impact on the other port’s output when the two ports are independent or strategic substitutes. The impact might be positive when the two ports are strategic complements. On the other hand, a port’s mitigation strategy may have either a positive or a negative impact on the other port’s output. The impact is more (less) likely to be negative when the two ports are strategic substitutes (complements) than when they are independent. Furthermore, a port’s mitigation strategy has a larger impact on its output compared with its adaptation strategy. The difference is larger (smaller) when the two ports are strategic complements (substitutes) than when they are independent. Besides, a port’s adaptation strategy has a larger (smaller) effect in reducing (increasing) the operation level of other ports compared with its mitigation strategy.
Keywords: Climate change, Mitigation, Adaptation, Strategic complement, Strategic substitute
Dr. Changmin Jiang is currently an assistant professor in the Apser School of Business, University of Manitoba. His research involves various issues and aspects in transportation economics and policy, with focuses on the interaction between various parties in a transportation system and its policy implication for the regulator. Dr. Jiang’s work has been published in top tier journals such as Transportation Research Part B: Methodological; Transportation Research Part A: Policy and Practice; and Journal of Business Ethics. He has won several major research grants and awards supported by the federal government of Canada.