Gatiso, Tsegaye Ginbo and Di Corato, Luca and Hoffmann, Ruben
(2021).
Investing in climate change adaptation and mitigation: A methodological review of real-options studies.
AMBIO: A Journal of the Human Environment. 50
, 229-241
[Article Review/Survey]
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Abstract
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.
Authors/Creators: | Gatiso, Tsegaye Ginbo and Di Corato, Luca and Hoffmann, Ruben | ||||||
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Title: | Investing in climate change adaptation and mitigation: A methodological review of real-options studies | ||||||
Series Name/Journal: | AMBIO: A Journal of the Human Environment | ||||||
Year of publishing : | 2021 | ||||||
Volume: | 50 | ||||||
Page range: | 229-241 | ||||||
Number of Pages: | 13 | ||||||
Publisher: | SPRINGER | ||||||
ISSN: | 0044-7447 | ||||||
Language: | English | ||||||
Publication Type: | Article Review/Survey | ||||||
Article category: | Scientific peer reviewed | ||||||
Version: | Published version | ||||||
Copyright: | Creative Commons: Attribution 4.0 | ||||||
Full Text Status: | Public | ||||||
Subjects: | (A) Swedish standard research categories 2011 > 5 Social Sciences > 502 Economics and Business > Economics | ||||||
Keywords: | Climate change adaptation, Climate change mitigation, Real-options, Uncertainty | ||||||
URN:NBN: | urn:nbn:se:slu:epsilon-p-106486 | ||||||
Permanent URL: | http://urn.kb.se/resolve?urn=urn:nbn:se:slu:epsilon-p-106486 | ||||||
Additional ID: |
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ID Code: | 19828 | ||||||
Faculty: | NJ - Fakulteten för naturresurser och jordbruksvetenskap | ||||||
Department: | (NL, NJ) > Dept. of Economics | ||||||
Deposited By: | SLUpub Connector | ||||||
Deposited On: | 30 Dec 2020 06:04 | ||||||
Metadata Last Modified: | 30 Dec 2020 06:11 |
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