Sammanfattning

Uncertain 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.

Nyckelord

Climate change adaptation; Climate change mitigation; Real-options; Uncertainty

Publicerad i

AMBIO: A Journal of the Human Environment
2021, Volym: 50, nummer: 1, sidor: 229-241
Utgivare: SPRINGER

SLU författare

• Hoffmann, Ruben

  • Institutionen för ekonomi, Sveriges lantbruksuniversitet
    

• Ginbo Gatiso, Tsegaye

  • Institutionen för ekonomi, Sveriges lantbruksuniversitet
    

Globala målen

SDG13 Vidta omedelbara åtgärder för att bekämpa klimatförändringarna och dess konsekvenser


UKÄ forskningsämne

Nationalekonomi


Publikationens identifierare

DOI: https://doi.org/10.1007/s13280-020-01342-8

Permanent länk till denna sida (URI)

https://res.slu.se/id/publ/106486