To mitigate or to adapt: How to confront global climate change

We analyze the strategic interaction between mitigation and adaptation in a non-cooperative game in which regions are players and mitigation and adaptation are perfect substitutes in protecting against climate impacts. We allow for step by step decision making, with mitigation chosen first and adaptation second, and where the benefits of mitigation accrue only in the future. If marginal costs of adaptation decline with global mitigation, high income regions simultaneously invest in mitigation and adaptation. Low income regions engage in mitigation only.