Real Options Analysis of Climate-change Adaptation: A Simplified Approach

2019 ◽  
Author(s):  
Graeme Guthrie
Keyword(s):  
Climate Change ◽  
Real Options ◽  
Climate Change Adaptation ◽  
Real Options Analysis ◽  
Simplified Approach

Economics of Making Roadway Pavements Resilient to Climate Change: Use of Discounted Cash Flow and Real Options Analysis

2019 ◽  
Vol 25 (3) ◽  
pp. 04019017 ◽  
Author(s):  
Nivedya M. Kottayi ◽  
Rajib B. Mallick ◽  
Jennifer M. Jacobs ◽  
Jo Sias Daniel
Keyword(s):  
Climate Change ◽  
Real Options ◽  
Cash Flow ◽  
Discounted Cash Flow ◽  
Real Options Analysis

scholarly journals Investing in climate change adaptation and mitigation: A methodological review of real-options studies

AMBIO ◽  
2020 ◽  
Vol 50 (1) ◽  
pp. 229-241
Author(s):  
Tsegaye Ginbo ◽  
Luca Di Corato ◽  
Ruben Hoffmann
Keyword(s):  
Climate Change ◽  
Real Options ◽  
Climate Change Adaptation ◽  
Real Option ◽  
Economic Value ◽  
Individual Risk ◽  
Complex Nature ◽  
Human Environment ◽  
Real Option Approach ◽  
Adaptation And Mitigation

AbstractUncertain future payoffs and irreversible costs characterize investment in climate change adaptation and mitigation. Under these conditions, it is relevant to analyze investment decisions in a real options framework, as this approach takes into account the economic value associated with investment time flexibility. In this paper, we provide an overview of the literature adopting a real option approach to analyze investment in climate change adaptation and mitigation, and examine how the uncertain impacts of climate change on the condition of the human environment, risk preferences, and strategic interactions among decisions-makers have been modeled. We found that the complex nature of uncertainties associated with climate change is typically only partially taken into account and that the analysis is usually limited to decisions taken by individual risk neutral profit maximizers. Our findings call for further research to fill the identified gaps.

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