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Strategic cooperation for transnational adaptation: lessons from the economics of climate change mitigation

  • Matteo RoggeroEmail author
  • Leonhard Kähler
  • Achim Hagen
Original Paper

Abstract

The literature on climate adaptation has so far conceptualized it as a domestic issue, to be governed somewhere between the local and the national scale. By contrast, scholars have shown little interest in exploring the case of cross-boundary adaptation spillovers, where adaptation by one country affects other countries. Two decades of the economic literature on climate mitigation may contribute to bridge this research gap because the problem structure of climate mitigation resembles that of adaptation with cross-boundary spillovers. With this in mind, we ask the following research question: Are there lessons to be learned by applying a mitigation perspective to the governance of adaptation with cross-boundary spillovers? After reviewing the relevant adaptation and mitigation literature, the paper applies mitigation insights to an adaptation case with cross-boundary spillovers: climate change-induced eutrophication in the Baltic Sea. Insights on coalition structures, side-payments, issue-linkage, and trade sanctions provide novel perspectives on the governance structures in place. To improve cooperation on providing adaptation as a public good, smaller regional governance arrangements could be more effective, European subsidies for pollution control might be redirected, and progress on eutrophication could be made a precondition for cooperation on other areas. These perspectives depart both from the way the Baltic Sea eutrophication problem is addressed at present, and from the way public goods are addressed in the adaptation literature. They show that some lessons can indeed be learned, calling for further research.

Keywords

Transnational adaptation Public goods Climate mitigation Governance arrangements Spillovers Baltic Sea 

List of abbreviations

BSRS

Baltic Sea Region Strategy

EU

European Union

HELCOM

Helsinki Commission

IEA

International Environmental Agreement

WFD

Water Framework Directive

1 Introduction

Previously a “taboo” within climate policy and research (Pielke et al. 2007), climate adaptation has now gathered momentum, acknowledging that climate change will be unavoidable even under the most ambitious mitigation goals. Further, the Paris Agreement has promoted adaptation from a fundamentally local endeavor to the object of international cooperation (Lesnikowski et al. 2017; Persson and Dzebo 2019). Up to now, the international dimension of climate adaptation has been limited to environmental justice considerations related to adaptation finance (Persson 2011). The present paper contributes to broadening such a perspective by exploring the case where adaptation by some countries affects other ones. In this way, this article contributes to the Special Issue by addressing the current knowledge gap around the problem structure of adaptation, under what conditions it can be considered a global/regional public good, and what are options for governance.

In such a case, adaptation resembles the problem structure at the core of climate mitigation economics: opportunistic free-riding on other nations’ efforts to address a common problem. It is thus worthwhile to explore findings from more than two decades of economic research on international environmental agreements (IEAs) for climate mitigation (from here on referred to as “IEA literature”), and see what implications they may have for transnational adaptation, i.e., adaptation taking place across the boundaries of nation states and involving non-state actors to some degree. With that in mind, we raise the following research question: Are there lessons to be learned by applying a mitigation perspective to the governance of adaptation with cross-boundary spillovers?

We address this question through an extensive literature review and with reference to the case of climate change-induced eutrophication in the Baltic Sea—an issue which is paradigmatic both as a case where adaptation by some countries affects other ones, and for its similarity with climate mitigation challenges. Applying insights from the IEA literature leads to rather counterintuitive implications for governance architectures in the Baltic Sea. Conveniently, such implications fit particularly well the transnational adaptation agenda as they involve multiple nation states and a plurality of governance architectures.

2 Literature review

The present work is centered around the concept of “cross-boundary adaptation spillovers”—externalities that occur if adaptation measures by one country affect other countries. Relying on that, the present section aims at establishing conceptual bridges between transnational adaptation and the IEA literature. It first introduces adaptation by framing climate adaptation in a transnational context. Subsequently, it raises four specific and interlinked sub-questions: (1) Does adaptation have spillovers? (2) Are adaptation spillovers cross-boundary? (3) What is the problem structure in the IEA literature? (4) What insights can be drawn from the IEA literature? We subsequently answer each of these questions by referencing the most relevant contributions from adaptation research (question 1 and 2) and from the IEA literature (question 3 and 4).

Climate adaptation describes how individuals, groups, and societies adjust to the observed and/or expected end of a stationary climate (Smit and Wandel 2006). Scholars distinguish “spontaneous” adaptation by individuals from “planned” adaptation as a part of climate policy (Smit and Pilifosova 2001). The present work focuses on planned adaptation. Scholarly debates in these respects have focused on the appropriate “level” of politico-administrative organization at which adaptation is best delivered (Dodman and Satterthwaite 2008). They are thus anchored to an understanding of adaptation as a task for either local or national governments—at best something requiring cooperation between the two. Adaptation, in other words, has been so far understood as a domestic affair, without any international dimension (Benzie and Persson 2019).

The reader may object that climate adaptation already has an international dimension, which relates to adaptation finance (Barrett 2013; Klein 2010). Adaptation finance, however, is based on a “pollutionist” perspective (Persson 2011) in which certain nations care for adaptation in and by other nations based on ethical grounds (Duus-Otterström 2016). The role of adaptation within the Kyoto Protocol reflects this very same understanding (Grasso 2006). By contrast, the present work is based on the premise that climate adaptation by one country affects other ones (Liverman 2016; Moser and Hart 2015; Hedlund et al. 2018). Here, adaptation acquires an international dimension not because of ethical considerations, but because cross-boundary spillovers lead to a different problem structure, where ethical considerations leave way to self-interest and, possibly, opportunism.

As long as adaptation is a domestic affair, it represents a private good at the international level. If, however, cross-boundary adaptation spillovers exist, adaptation can have public good characteristics, leading to social dilemmas among countries. Social dilemmas linked to public good provision are not new to the adaptation literature (Bisaro and Hinkel 2016), but were never addressed in cross-boundary terms. Acknowledging this, Dzebo and Stripple (2015) propose the concept of transnational adaptation: adaptation taking place across the boundaries of nation states and involving non-state actors to some degree. Questioning the domestic understanding of climate adaptation, such a definition acknowledges a more complex set of interactions and governance arenas than previously accounted for (Hedlund et al. 2018; see also Dzebo 2019).

Against this background, the present contribution seeks to advance our understanding of the link between the problem structure inherent to transnational adaptation and the institutional arrangements shaping it. It does so by tapping into the IEA literature, a body of scholarly work centered on a similar problem structure as the one identified herewith: cross-boundary spillovers leading to social dilemmas in the provision of a public good. More than two decades of IEA literature focusing on this very problem may provide lessons for transnational adaptation as well. Crucially, such insights will fit with the global and transnational adaptation agenda as they open up to different architectures and multi-level arrangements.

2.1 Does adaptation have spillovers?

The first step in establishing a bridge between transnational adaptation and the IEA literature concerns the question whether adaptation has spillovers altogether. Adaptation scholars have so far had little interest in the possibility that adaptation by some may have spillovers (Dzebo and Stripple 2015). That is not surprising: scholars addressing “barriers” to adaptation (Eisenack et al. 2014) have shown that adaptation has so far taken place too little rather than too much and/or in the wrong place. Spillovers (cross-boundary or not) are more likely to become evident once adaptation has been implemented at a sufficient scale, not before.

Evidence of spillovers from adaptation can nevertheless be found, with reference to the concept of “no-regret” adaptation measures: adaptations that are beneficial regardless of the actual on-setting of the respective climate impacts. Typical examples are green areas in cities that next to protecting citizens against heat waves (Bowler et al. 2010) also have a recreational value (James et al. 2009), together with positive effects on, e.g., local air quality (Jim and Chen 2008). These measures qualify as “no-regret” in light of the effects they have apart from their main purpose of reducing climate vulnerability. Thus, they do have spillovers.

Spillovers from adaptation, furthermore, are not always positive. The concept of maladaptation (Juhola et al. 2016) describes situations where adaptation takes place, but fails to reduce vulnerability. Adaptation efforts can end up shifting vulnerability rather than reducing it, and produce unintended effects and external spillovers (Atteridge and Remling 2018). Flood control measures in the Mekong delta allow for agricultural harvesting to continue well into the flood season, leading, however, to fish decline and poorer soils (Chapman et al. 2016). Poorly designed coastal erosion measures in Cape Town, South Africa, led to the release of plastic debris into the coastal environment (Magnan et al. 2016). Maladaptation may also exacerbate vulnerability in cases where it leads to increased emissions of greenhouse gases. Adaptation may have negative spillovers too.

2.2 Are adaptation spillovers cross-boundary?

The second step in establishing a bridge between transnational adaptation and the IEA literature lies in the cross-boundary dimension of adaptation spillovers. Evidence for that is available. Consider adaptation measures such as the urban green areas mentioned above. The very same climate impacts (e.g., heat waves, heavy rains) can also be tackled through green belts, wetlands, and other types of natural habitats in the outskirts of urban centers—an approach that goes under the header of “ecosystem-based adaptation” (Chong 2014). Next to addressing climate impacts, ecosystem-based adaptation contributes positively to regional or global public goods such as bird migration and biodiversity (Munang et al. 2013). There are thus adaptations with cross-boundary spillovers (see also Tigre 2019).

Negative cross-boundary spillovers can be found too. Failing to address climate change may cause major cross-border population displacements in the near future (Subramanian and Urpelainen 2014). Raising dykes to tackle floods tends to shift the problem further downstream. That is particularly problematic in the case of transboundary rivers, which are a typical case for international cooperation (McLaughlin Mitchell 2006). Internationally shared resources such as transboundary rivers are certainly not immune to climate change impacts (Kistin and Ashton 2008). At the very least, adaptation is constrained by the architectures shaping the shared management of such resources, making it subject to the same degree of international cooperation.

An easy objection may be that adaptation spillovers affecting internationally shared resources are likely to be negligible. Evidence is available that this is not the case (see also Benzie and Persson 2019). One good example is the Baltic Sea. Rivers flowing into it are rich in nutrients from agriculture (Ducrotoy and Elliott 2008). Climate change will alter precipitation patterns across states in the Baltic Sea region (Kundzewicz 2009), increasing nutrient runoff from agriculture, worsening the state of their inland waters, and increasing nutrient loads into the Baltic Sea. Unless adaptation takes place, mainly in the form of changed agricultural practices and wetland restoration, the Baltic Sea may experience up to 18% more nitrogen and 21% more phosphorous under particular scenarios (Huttunen et al. 2015), which does not seem negligible.

2.3 What is the problem structure in the IEA literature?

The third step in establishing a bridge between transnational adaptation and the IEA literature concerns the problem structure. We hereby refer to the game theoretic literature on international environmental agreements (IEAs). Since the early 1990s, this branch of climate economics literature studies international cooperation for climate mitigation (Carraro and Siniscalco 1993; Barrett 1994). Based on concepts from the theory of economic cartels (d’Aspremont et al. 1983; Chander and Tulkens 1995), it frames IEAs as stable coalitions whose members contribute to a public good. Later on, the analysis was extended to different policy measures that may help to reach an outcome as close as possible to the social optimum (Marrouch and Ray Chaudhuri 2016).

The problem structure thus analyzed revolves around the provision of a pure public good. In a mitigation setting, the abatement of greenhouse gas emissions is costly, and the benefits one can derive from it are conditional to the abatement of others (Stern 2007). That already disincentivizes abatement. Furthermore, other countries can free-ride on the efforts of those countries that do reduce their emissions, sharing the thus obtained benefits (Hoel 1991). An important mechanism for that is carbon leakage, which means that carbon-intensive industry relocates production to countries with fewer restrictions (Felder and Rutherford 1993). That disincentivize abatement even further. Local co-benefits, instead, can motivate actors to abate (e.g., Bollen 2009), shifting the problem structure to one of an impure public good.

In the absence of a supranational authority prescribing a certain degree of effort by all beneficiaries of climate mitigation, progress relies on voluntary agreements, involving coalitions of countries willing to abate. Countries, however, may seek renegotiation at later stages, creating uncertainty (Weikard et al. 2010). Against this background, the literature addresses the size and stability of such coalitions, both in general and in relation to the policy instruments being used. As for the Baltic Sea, in the presence of cross-boundary adaptation spillovers, a problem structure emerges that resembles the one sketched herewith. If the problem structure is similar, we argue, insights from the one context can be transferred to the other.

2.4 What insights can be drawn from the IEA literature?

The fourth step in establishing a bridge between transnational adaptation and the IEA literature concerns the insights to be borrowed. The general finding is that because of free-riding, coalitions will tend to be small and achieve little. This is the “paradox of cooperation”: stable coalitions achieve little when cooperation matters most in terms of improvement over the noncooperative outcome (Barrett 1994). To overcome this problem, the IEA literature has proposed several approaches to enhance cooperation.

One approach concerns coalition structures, such as “climate clubs.” Countries can form coalitions that are not exclusive but coexist, i.e., several coalitions can be formed in parallel. Both theoretical (e.g., Asheim et al. 2006; Hagen and Eisenack 2019; Hagen et al. 2017) and simulation studies (e.g., Osmani and Tol 2010; Bosello et al. 2003) find that under certain circumstances, multiple small coalitions may lead to higher participation and greater supply of the public good compared to what would have been achieved with a single coalition. Each of the small coalitions decides to contribute to the public good, so that the sum of the contributions exceeds that of a single coalition (which would be subject to the “paradox of cooperation”).

Second, side-payments were introduced in seminal papers by Hoel (1991) and Carraro and Siniscalco (1993). They have shown that welfare transfers between countries can increase cooperation. If benefits from abatement are asymmetric across countries, those with high benefits from abatement can increase the size of the coalition by providing side-payments to countries with lower benefits from abatement, leading to higher levels of global abatement and welfare (Barrett 2001; Dellink 2011; Lessmann et al. 2015; Sælen 2016). Ansink et al. (2018) show that if outsider countries can support coalition members with monetary transfers, coalition size, and contribution to the public good increases.

A third approach involves issue-linkage. It is based on the premise that there can be different sources of externalities between the countries involved: cooperation on one issue can then be made conditional to cooperation on another one (Folmer and van Mouche 1994). Interestingly, this does not need to be of environmental nature (Folmer et al. 1993). Care is due, however, since issue-linkage may as well decrease cooperation (Carraro and Marchiori 2004). Issues that seem particularly suitable for linkage with environmental negotiations include research and development (e.g., Carraro and Siniscalco 1997), international debt swaps (Mohr and Thomas 1998) and trade (e.g., Barrett 1997; Wu and Thill 2018).

Finally, trade sanctions have received particular attention recently (Lessmann et al. 2009; Nordhaus 2015; Böhringer et al. 2016; Hagen and Schneider 2017). Here, the idea is to apply sanctions to encourage participation in the IEA. By including trade penalties against outsiders in the climate agreement, countries are incentivized to join. Lessmann et al. (2009) and Nordhaus (2015) find that already small penalties can be sufficient to stabilize a large climate coalition with high abatement levels. If retaliation occurs, however, trade sanctions may prove counterproductive (Hagen and Schneider 2017).

3 Applying mitigation insights to an adaptation case: eutrophication in the Baltic Sea

In light of the four approaches to promote strategic cooperation from the IEA literature introduced above, the present section provides an illustrative application to an actual case: climate change-induced eutrophication in the Baltic Sea. Section 3.1 presents the case (1) as an adaptation case; (2) with cross-boundary spillovers; in order to (3) outline the resulting problem structure and (4) compare it to the one the IEA literature is concerned with. Section 3.2 will then briefly present the current governance arrangements in place. Subsequently, Sect. 3.3 will analyze such arrangements through the lenses of the IEA literature.

3.1 The problem structure

The physical environment of the Baltic Sea is under severe anthropogenic pressure (Johannesson et al. 2011). Eutrophication due to agricultural nutrient runoff is “perhaps the biggest problem confronting the Baltic” (Ducrotoy and Elliott 2008, p. 14). It consists, in a nutshell, of algal blooms caused by the high availability of nitrogen and phosphorous, reducing both the light and the oxygen available in the water column, and negatively affecting the water ecosystem as a result. A recent Helsinki Commission (HELCOM) assessment of the state of the Baltic Sea (HELCOM 2018) reports that 97% of the Baltic Sea surface is affected by eutrophication that only 12% of the area is achieving a good status, and that the trend is negative despite substantial reductions in the nutrient inputs. This causes welfare losses for the Baltic Sea region estimated at around EUR 3.600 Million per year (Ahtiainen et al. 2014).

Climate change makes things worse by increasing precipitation; it increases nutrient runoff from the fields to the rivers and toward the sea (Andersson et al. 2015; Friedland et al. 2012). Simulations foresee change in nutrient loads between − 9 and + 18% for nitrogen and between − 7 and + 21% for phosphorous (Huttunen et al. 2015). Crucially, variation depends on the socioeconomic scenarios and modeling uncertainties, but adaptation can significantly reduce the resulting impact upon the Baltic Sea (ibid.).

Nutrients reach the Baltic Sea through the inland and coastal waters of the different states within the drainage basin. Adaptation to climate change in this case thus means abatement, i.e., preventing nutrient leakage at the source (that is, less agriculture or at least less fertilizers) or creating wetlands as close as possible to the nutrient sources. Countries have an interest in doing so, because nutrients from their own agriculture affect their own inland waters first. Agricultural nutrients are thus a domestic nuisance before they even affect the Baltic Sea. To the extent, climate change leads to increased precipitation, and nutrient loads increase because of that adaptation corresponds to additional restrictions in the use of fertilizers, and to the creation of additional wetlands absorbing the additional load.

Let us now gauge the problem structure. Consider the individual state’s decision whether to curb nutrient runoff from agriculture. For each state, abatement costs stand against eutrophication-related losses in the environmental quality of both inland waters and the Baltic Sea as a whole. Benefits from cleaner inland waters (e.g., scenic beauty, tourism revenues, inland fisheries) constitute a private good for the individual state in which they are located. Benefits derived from the environmental quality of the Baltic Sea constitute instead a public good affected by the cumulative effort of all states in the region.

Facing a trade-off between abatement costs and environmental benefits, states can make their choices. At present, efforts vary, with Finland and Sweden among the more proactive and Russia on the more reluctant side (Hassler 2017). Results are cumulatively not sufficient to significantly decrease nutrient loads in the Baltic Sea (Elmgren et al. 2015). Against this status quo, climate change alters precipitation patterns, raising the amount of nutrients being discharged into the water bodies and thus increasing the underprovision of eutrophication abatement. Adaptation represents the efforts necessary to counterbalance the effects of the additional nutrient runoff caused by climate change.

Let us now consider the different elements of the problem structure just laid out. These are: a public good (1); a baseline level of anthropogenic pollution (2); private benefits from the abatement of such pollution (3), which are not enough to avoid underprovision (4). Since full abatement in one state would not compensate for no abatement in another state, there is a need for cooperation (5) and a corresponding risk of free-riding (6), since every country can hold back abatement and enjoy the fruits of the efforts of the other states. Finally, the nuisance at stake is problematic per se (7), but becomes even more problematic in light of future trends: increased precipitation due to climate change (8).

The reader will have noted that the problem structure is more complex than a “mere” public good. The same holds for climate mitigation: next to the atmosphere as a public good (1) and the corresponding collective action challenges (5, 6), climate mitigation also features: baseline CO2 emissions (2); private benefits through, e.g., better air quality (3), leading, however, to insufficient abatement (4); and future trend worsening the problem: demographic and socioeconomic growth (8). Thus, in the presence of cross-boundary spillovers, the problem structure of adaptation resembles that of climate mitigation.

3.2 Baltic Sea governance arrangements

Almost all of the Baltic Sea falls within the Exclusive Economic Zones of the various countries around its coasts: Sweden, Denmark, Germany, Poland, Russia, Lithuania, Estonia, Latvia, and Finland (Backer 2011). All such countries belong to the European Union (EU), with the notable exception of Russia. Furthermore, about half of them are former Soviet countries, with a history of lax environmental regulation and intensive agriculture. The EU accession has dramatically improved environmental standards in Poland, Lithuania, Estonia, Latvia, yet not enough to lower the concentrations of nutrients in the Baltic (Elmgren et al. 2015).

The major but not exclusive presence of EU Member states in the Baltic Sea region leads to a complex governance architecture. A central piece of legislation is the EU’s Water Framework Directive (WFD), requiring the achievement of a Good Ecological Status in the whole basin, including both Baltic Sea’s waters and the inland water bodies of the surrounding member states. Furthermore, the EU has developed a regional approach to the management of the Baltic Sea. First of its kind, the Baltic Sea Region Strategy (BSRS) consists of a framework coordinating EU projects addressing the state of the Baltic Sea, facilitating regional cooperation.

The BSRS action plan spells out goals and objectives for the region, with water quality and eutrophication featuring prominently therein. It is however non-binding. Similarly, the Helsinki Convention spells out goals and objectives for the management of the Baltic Sea, giving a prominent role to combating eutrophication—again without a binding character. Compared to the BSRS, the Helsinki Convention and its secretariat (the Helsinki Commission: HELCOM) have the merit of including Russia. HELCOM also features the polluter-pays-principle and the precautionary principle, which have however never been translated into operational management tools (Ducrotoy and Elliott 2008).

In all of the above, climate impacts are featured only peripherally (Backer et al. 2010; Elliott et al. 2015). In the absence of coordinated and agreed-upon adaptation measures, the governance architecture addressing cross-boundary adaptation spillovers is the one resulting from the interplay of WFD, BSRS, and HELCOM. Specifically, the question emerges whether national adaptations are somehow coordinated with an eye on their effects upon the Baltic Sea eutrophication problem. Hassler (2017) finds little willingness among signatories to cooperate on this topic. Karlsson et al. (2016) and Elmgren et al. (2015) come to similar conclusions, while Bengtsson (2009) points at the lack of an external perspective, particularly concerning the role of Russia. Furthermore, Piwowarczyk et al. (2012) show how key decision-makers are preoccupied with more pressing social and economic issues, deeming climate change as secondary. As a result, the available governance architecture is presently only able to achieve consensus on abstract strategies and on the need of dialogue. Ambitious initiatives seem out of reach (Backer 2011).

3.3 Applying an IEA perspective

Having sketched both the problem structure and the existing governance arrangements, it is now possible to explore the implications of coalition structures, side-payments, issue-linkage, and trade sanctions for the Baltic case. In terms of coalition structures, the counterintuitive insight is that multiple small arrangements can be superior to a single one that does not involve everybody. Translated for the Baltic context, it implies that multiple small groups of states in the Baltic Sea region may possibly achieve more than a single, but not all encompassing group. Against this background, two main questions arise.

First, the very existence of BSRS hints at a new development of EU governance toward regional arrangements. In these respects, the IEA literature raises the question whether more effective cooperation could be sought among some states, creating subregional arrangements. Note how this goes against the received wisdom of resource arrangements “fitting” the geographical extent of a given resource as much as possible (Young 2002; Moss 2012). It also goes counter to the expectations of regional public good scholars (Sandler 1998, 2006) justifying larger jurisdictions (e.g., through economies of scope), not smaller ones. By contrast, from an IEA perspective, BSRS could be surprisingly too large to be stable and effective.

Second, the BSRS has the same scope of HELCOM, minus Russia. One could thus look at BSRS as the smaller but stable coalition the IEA literature points at. By the same token, other sub-coalitions within HELCOM could be studied. The most notorious source of instability is the rift between EU and Russia. Paradoxically, the EU–Russia relations may overshadow other distinctions among HELCOM signatories which may lead to stable coalitions. Candidates could be the differentials in marginal costs across states, the differentials in marginal private benefits from abatement, or the actual ability to free-ride.

Side-payments can be a source of stability if costs vary substantially across countries. Indeed, a few studies find scope for addressing eutrophication in the Baltic region through side-payments (Markowska and Zylicz 1999; Gren 2008). Side-payments do appear in the HELCOM context (Hassler 2017), albeit with little political support. They are well established at a bilateral level, e.g., between Sweden and Russia (Sida 2019). A different take could focus on the link between BSRS and EU subsidies. The BSRS does not proactively crafts projects potentially eligible for EU funding. Instead, it receives project proposals from the countries’ local and regional administrations and redirects them to the EU. This effectively ensures that payments go to those states that proactively seek support. Side-payments are effective if they target those states where benefits are comparatively lower, and these are not necessarily the same states as those that proactively seek funding. More likely, proactive states are those where the transaction costs of funding application are lower, regardless of the actual benefits.

Political and legal feasibility aside, the IEA literature also suggests that there may be scope for “outsiders” to use side-payments to motivate specific EU countries to pursue adaptation within BSRS, if doing so proves more cost-effective than the available domestic options. If costs are prohibitively high in Russia and Poland, these countries could still consider contributing to adaptation through side-payments to, e.g., Latvia, Lithuania or Estonia. They will not reap the private benefits of cleaner inland waters, but they may still protect their own fishing fleets from the costs of additional eutrophication caused by climate change. This would be a major departure from the current situation, where side-payments rather flow to Russia (and Belarus, which lies in the Baltic Sea’s broader catchment) from the EU (European Court of Auditors 2016) and from individual states (Sida 2019).

Issue-linkage in the Baltic context would entail tying cooperation in other areas to the cooperation achieved in combating eutrophication. It presupposes that other concerns (environmental or not) may be sufficiently (more) valuable to free-riders to motivate them to contribute. To an extent, issue-linkage may already be at play in the Baltic: EU accession has been functional in the implementation of EU environmental regulations in eastern European countries (Kay 2014), and traces of that can be found in the HELCOM process too (Hassler 2017).

Issue-linkage has also interesting implications for BSRS, which serves as a coordination platform for all Baltic issues, and was built around the ecosystem approach (Backer et al. 2010). Issue-linkage is certainly compatible with the ecosystem approach. It provides, however, an additional suggestion: there may be a merit in linking adaptation strategies to completely unrelated issues, without any ecological interdependencies (and thus outside the scope of the ecosystem approach). The only important precondition would be that the interests of the involved parties are such that they prevent free-riding.

Finally, trade sanctions would correspond, in the Baltic context, to impose higher tariffs and/or bans on products from states that fail to adapt to eutrophication. This seems to be the least applicable approach and is reported here only for the sake of completeness. Applying tariffs inside the EU seems hardly compatible with European law. On the Russian front, instead, trade sanctions are a reality (at the time of writing), but concern much bigger geopolitical issues (e.g., Crimea’s annexation by Russia, Iran’s nuclear program) than eutrophication.

4 Discussion

Departing from the Baltic Sea case and carefully formulating more general lessons for adaptation in the presence of cross-boundary spillovers, the core insights gained by applying an IEA perspective are the following:
  • Multiple coalitions by few, motivated countries and/or countries in similar conditions may achieve more than a single coalition because the prospects of a large coalition involving most affected parties are marred by free-riding.

  • Side-payments should target countries that are not proactive, rather than rewarding countries that already are proactive. National and international adaptation funding schemes may be reconsidered accordingly.

  • As an alternative to pursuing integrated strategies, transnational adaptation could be linked to international cooperation on areas with no biophysical link to the recipients of adaptation.

  • Trade sanctions may be used to push countries to provide adaptation with cross-boundary spillovers. Their geopolitical costs do not seem commensurate to the gains they can achieve, though.

Given the explorative character of the present work, caution is due. The present analysis has a number of potential limitations, which are worth considering. A first limitation is that the analysis focuses specifically on cross-boundary adaptation spillovers. Transnational adaptation is likely to be more heterogeneous than that in terms of transnational governance efforts targeting adaptation cases with other problem structures and at other scales than across national boundaries (see Papin 2019; Dzebo 2019). An assessment of such heterogeneity is necessary before claiming that the analytical similarities with the IEA literature hold generally. Future research can provide such an assessment, e.g., through a systematic review of potential transnational adaptation cases.

A second, more serious limitation is that insights from the IEA literature were mostly derived by solving mathematical game theoretical models, not through empirical testing. The limitation here is only apparent, though. The application of IEA insights to adaptation cases would need to be tested empirically regardless of the empirical underpinning of the IEA literature.

Finally, a limitation comes from the possibility that analytical similarities disappear as soon as the analysis is carried out at a greater level of detail. This is unavoidable. The takeaway is thus that at a general level, both mitigation and transnational adaptation may contribute to a unified overarching theory of how states cooperate on the contribution of public goods; more refined theories will instead be problem-specific. This is potentially true even among different instances of transnational adaptation: at a closer look, e.g., the role of coalitions may prove to be crucial in a marine governance setting but fully irrelevant in a biodiversity one. Further research will tell.

5 Conclusions

The present analysis addressed the question whether there are lessons to be learned by applying a mitigation perspective to the governance of adaptation with cross-boundary spillovers. Exploring the IEA literature and applying its core insights to a paradigmatic case of adaptation with cross-boundary spillovers—eutrophication in the Baltic Sea—has provided several, rather counterintuitive insights on the challenges faced therein. In light of the explorative character of the present analysis, the paper’s main research question can thus be answered with a careful yes: there seems to be lessons to be learned, and a closer look is certainly worthwhile. If that is the case, what are the implications for policy and research?

In terms of policy implications, if all countries cannot be brought on board, it might be better to go for deep and narrow agreements than to go for ones that are shallow and broad. That is certainly an intriguing message. Being able to reach agreements with just some of the parties involved (and not all) has the potential to significantly lower the transaction costs connected with enacting problem-solving policies; it would allow for far reaching cooperation agreements among groups of states rather than slow and limited arrangements that have to apply to all. The more so in a context, in which the EU becomes open toward regional arrangements.

Going for small coalitions, as opposed to striving toward agreements shared by all parties involved, also seems to grant a stronger role to soft-power, lobbying, and ultimately informal arrangements rather than hard law and formal commitments. This is not uncommon in an EU-setting, and certainly liberating from the point of view of those practitioners brokering deals between national governments. Practitioners will certainly be aware, however, of the costs such an approach has in terms of legitimacy, accountability, and transparency.

Concerning the implications for research, these are best spelled out with reference to the different sub-questions addressed above. The first consideration concerns the question, whether adaptation has spillovers. Adaptation spillovers are not completely new, but they are not high on the agenda either. This is likely due to the little progress of adaptation on the ground. Climate change will not be halted, and adaptation is bound to become increasingly frequent. The more adaptation happens on the ground, the likelier that adaptation spillovers will manifest themselves, supporting the agenda laid down herewith. The transnational adaptation research agenda has thus the potential to anticipate future developments and lay down a few seminal contributions on the matter.

The second question concerns whether adaptation spillovers are cross-boundary. Future research can build on the papers in this special issue to tell whether the incidence of transnational adaptation viz. purely local adaptation is substantial, or whether transnational adaptation represents a niche. More interesting is the question whether cross-boundary adaptation spillovers will prove to be non-negligible. Systematically reviewing the available literature will allow addressing that question. Ultimately, though, it will be dedicated assessments that provide a conclusive answer (cf. Benzie and Persson 2019). These may never come about if scholars do not challenge the received wisdom that adaptation is a purely domestic issue.

A third avenue for research concerns the question, whether cross-boundary adaptation spillovers generate a problem structure that resembles climate mitigation. The present analysis has relied upon the IEA literature in terms of its findings. These have been applied to the problem at hand after comparing problem structures. The basic assumption underlying such procedure is that as long as empirically different problems are analytically similar, findings are generally applicable. Future research could carry out the same analysis at the level of the actual models rather than at the level of the findings. Doing so would allow to verify up to which point mitigation and cross-boundary adaptation spillovers are analytically identical. An example for such a model can be found in Ahlvik and Pavlova (2013), who set up an IEA model of coalition formation for the eutrophication problem in the Baltic Sea region (although without an explicit reference to climate adaption).

Finally, a fourth avenue for future research pertains the question, whether it is possible to leverage mitigation knowledge in order to address cross-boundary adaptation spillovers. In these respects, research could spell out the technical dimension of “translating” economic models from mitigation to adaptation, identifying gaps, pitfalls, low-hanging fruits and, of course, benefits. More importantly, it will be able to explore actual mechanisms, verify the empirical plausibility of the assumptions underneath the “translated” models, and provide a nuanced approach concerning both the applicability of the models and the transferability of the respective findings.

Summarizing, there are lessons to be learned from applying a mitigation perspective to adaptation with transboundary spillovers, and these have important implications for both policy and research. As the above shows, acknowledging that adaptation in one country may affect other countries opens a broad range of avenues for further research, which may lead to innovative approaches to currently unresolved adaptation problems. The emergence of the literature on transnational adaptation taking up this perspective is thus a welcome and promising development.

Notes

Acknowledgements

We would like to thank our colleagues at the Resource Economics Group, Humboldt-Universität zu Berlin, Adis Dzebo, Åsa Persson, and two anonymous reviewers for their constructive comments and suggestions on early versions of this paper.

Compliance with ethical standards

Conflict of interest

The authors declare that they have no conflict of interest.

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Authors and Affiliations

  1. 1.Humboldt-Universität zu BerlinBerlinGermany

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