IDEAS home Printed from https://ideas.repec.org/p/ags/ancewp/249390.html
   My bibliography  Save this paper

Adaptation to Climate Change: Formulating Policy under Uncertainty

Author

Listed:
  • Dobes, Leo

Abstract

Economists were able to formulate and recommend policy approaches for reducing emissions of greenhouse gases (mitigation) by drawing on an existing body of economic theory related to externalities. However, no comparably straightforward approach has yet emerged in the adaptation literature, possibly due to the diffuse nature of climatic effects that may occur in very diverse geographical locations. By acknowledging that the hallmark of future climate change effects is uncertainty, rather than readily identifiable and deterministic outcomes, it is possible to formulate coherent policy approaches. Recognising that there are differing degrees of uncertainty is a key aspect to making policy formulation more realistic.

Suggested Citation

  • Dobes, Leo, 2012. "Adaptation to Climate Change: Formulating Policy under Uncertainty," Working Papers 249390, Australian National University, Centre for Climate Economics & Policy.
    • Handle: RePEc:ags:ancewp:249390
    DOI: 10.22004/ag.econ.249390
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/249390/files/CCEP1201Dobes.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.249390?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Dobes, Leo, 2010. "Notes on applying ‘real options’ to climate change adaptation measures, with examples from Vietnam," Working Papers 249384, Australian National University, Centre for Climate Economics & Policy.
    2. Avinash K. Dixit & Robert S. Pindyck, 1994. "Investment under Uncertainty," Economics Books, Princeton University Press, edition 1, number 5474.
    3. Hendrik Wolff & Howard Chong & Maximilian Auffhammer, 2011. "Classification, Detection and Consequences of Data Error: Evidence from the Human Development Index," Economic Journal, Royal Economic Society, vol. 121(553), pages 843-870, June.
    4. Quiggin, John, 2005. "Economists and Uncertainty," Risk and Sustainable Management Group Working Papers 151169, University of Queensland, School of Economics.
    5. Davis, Graham A., 1996. "Real options: Managerial flexibility and strategy in resource allocation : Lenos Trigeorgis The MIT Press, Cambridge, MA, 1996, xiii + 427 pp. (hardcover), ISBN 0-262-20102-X," Resources Policy, Elsevier, vol. 22(3), pages 218-220, September.
    6. Pierre Van Der Eng, 2010. "Market Responses To Climate Stress: Rice In Java In The 1930s," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 50(1), pages 62-79, March.
    7. Leo Dobes, 2008. "Getting Real about Adapting to Climate Change: Using ‘Real Options’ to Address the Uncertainties," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 15(3), pages 55-72.
    8. Adam Borison, 2005. "Real Options Analysis: Where Are the Emperor's Clothes?," Journal of Applied Corporate Finance, Morgan Stanley, vol. 17(2), pages 17-31, March.
    9. Kunreuther, Howard C. & Michel-Kerjan, Erwann O., 2011. "At War with the Weather: Managing Large-Scale Risks in a New Era of Catastrophes," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262516543, December.
    10. Leo Dobes, 2009. "People versus planners: Social Preferences for Adaptation to Climate Change," Environmental Economics Research Hub Research Reports 0941, Environmental Economics Research Hub, Crawford School of Public Policy, The Australian National University.
    11. Randall,Alan, 2011. "Risk and Precaution," Cambridge Books, Cambridge University Press, number 9780521759199.
    12. Richard T. Woodward & Richard C. Bishop, 1997. "How to Decide When Experts Disagree: Uncertainty-Based Choice Rules in Environmental Policy," Land Economics, University of Wisconsin Press, vol. 73(4), pages 492-507.
    13. Dobes, Leo, 2009. "Adapting More Cleverly To Climate Change By Using ‘Real Options’ To Address The Uncertainties," 2009 Conference (53rd), February 11-13, 2009, Cairns, Australia 47615, Australian Agricultural and Resource Economics Society.
    14. Randall,Alan, 2011. "Risk and Precaution," Cambridge Books, Cambridge University Press, number 9780521766159.
    15. Ian J. Bateman & Richard T. Carson & Brett Day & Michael Hanemann & Nick Hanley & Tannis Hett & Michael Jones-Lee & Graham Loomes, 2002. "Economic Valuation with Stated Preference Techniques," Books, Edward Elgar Publishing, number 2639.
    16. -, 2009. "The economics of climate change," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 38679, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    17. Leo Dobes & Jeff Bennett, 2009. "Multi-Criteria Analysis: "Good Enough" for Government Work?," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 16(3), pages 7-30.
    18. World Bank, 2011. "Climate Change and Fiscal Policy : A Report for APEC," World Bank Publications - Reports 2734, The World Bank Group.
    19. Stéphane Hallegatte & Philippe Ambrosi & Jean Charles Hourcade, 2007. "Using Climate Analogues for Assessing Climate Change Economic Impacts in Urban Areas," Post-Print hal-00164627, HAL.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Climate Change Adaptation in Pacific island countries: Donors, Big Men, Real Options
      by Matthew Dornan in Development Policy Blog on 2012-02-01 01:00:17
    2. Crawford School Working Papers in January 2012
      by David Stern in Stochastic Trend on 2012-02-03 00:03:00
    3. Top Three Crawford Working Papers in March 2012
      by David Stern in Stochastic Trend on 2012-04-02 15:14:00

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dobes Leo & Jotzo Frank & Stern David I., 2014. "The Economics of Global Climate Change: A Historical Literature Review," Review of Economics, De Gruyter, vol. 65(3), pages 281-320, December.
    2. World Bank, 2011. "Climate Change and Fiscal Policy : A Report for APEC," World Bank Publications - Reports 2734, The World Bank Group.
    3. Dobes, Leo, 2010. "Notes on applying ‘real options’ to climate change adaptation measures, with examples from Vietnam," Working Papers 249384, Australian National University, Centre for Climate Economics & Policy.
    4. David Martimort & Stéphane Straub, 2016. "How To Design Infrastructure Contracts In A Warming World: A Critical Appraisal Of Public–Private Partnerships," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 57(1), pages 61-88, February.
    5. W. Botzen & Jeroen Bergh, 2014. "Specifications of Social Welfare in Economic Studies of Climate Policy: Overview of Criteria and Related Policy Insights," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 58(1), pages 1-33, May.
    6. David Martimort & Stéphane Straub, 2016. "How To Design Infrastructure Contracts In A Warming World: A Critical Appraisal Of Public–Private Partnerships," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 57, pages 61-88, February.
    7. Klepper, Gernot & Dovern, Jonas & Rickels, Wilfried & Barben, Daniel & Goeschl, Timo & Harnisch, Sebastian & Heyen, Daniel & Janich, Nina & Maas, Achim & Matzner, Nils & Scheffran, Jürgen & Uther, Ste, 2016. "Herausforderung Climate Engineering: Bewertung neuer Optionen für den Klimaschutz," Kieler Beiträge zur Wirtschaftspolitik 8, Kiel Institute for the World Economy (IfW Kiel).
    8. Heuson, Clemens & Gawel, Erik & Gebhardt, Oliver & Hansjürgens, Bernd & Lehmann, Paul & Meyer, Volker & Schwarze, Reimund, 2012. "Ökonomische Grundfragen der Klimaanpassung: Umrisse eines neuen Forschungsprogramms," UFZ Reports 02/2012, Helmholtz Centre for Environmental Research (UFZ).
    9. Alan Randall, 2014. "Weak sustainability, conservation and precaution," Chapters, in: Giles Atkinson & Simon Dietz & Eric Neumayer & Matthew Agarwala (ed.), Handbook of Sustainable Development, chapter 10, pages 160-172, Edward Elgar Publishing.
    10. Heuson, Clemens & Gawel, Erik & Gebhardt, Oliver & Hansjürgens, Bernd & Lehmann, Paul & Meyer, Volker & Schwarze, Reimund, 2012. "Fundamental questions on the economics of climate adaptation: Outlines of a new research programme," UFZ Reports 05/2012, Helmholtz Centre for Environmental Research (UFZ).
    11. Adrian Vermeule, 2015. "Rationally Arbitrary Decisions in Administrative Law," The Journal of Legal Studies, University of Chicago Press, vol. 44(S2), pages 475-507.
    12. van den Bergh, J.C.J.M. & Botzen, W.J.W., 2015. "Monetary valuation of the social cost of CO2 emissions: A critical survey," Ecological Economics, Elsevier, vol. 114(C), pages 33-46.
    13. Golub, Alexander (Голуб, Александр), 2018. "Methodological Issues of Assessing Investment Risks in Projects Weakening the Dependence of the Russian Economy on Natural Resources and Providing a Transition to Low-Carbon Development [Методологи," Working Papers 071802, Russian Presidential Academy of National Economy and Public Administration.
    14. Uwe Beyer & Oliver Ullrich, 2022. "Organizational Complexity as a Contributing Factor to Underperformance," Businesses, MDPI, vol. 2(1), pages 1-15, March.
    15. Guedes, José & Santos, Pedro, 2016. "Valuing an offshore oil exploration and production project through real options analysis," Energy Economics, Elsevier, vol. 60(C), pages 377-386.
    16. Arun S. Malik & Stephen C. Smith, 2012. "Adaptation To Climate Change In Low-Income Countries: Lessons From Current Research And Needs From Future Research," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 3(02), pages 1-22.
    17. Seiji Harikae & James S. Dyer & Tianyang Wang, 2021. "Valuing Real Options in the Volatile Real World," Production and Operations Management, Production and Operations Management Society, vol. 30(1), pages 171-189, January.
    18. Klaus Mittenzwei & David S. Bullock & Klaus Salhofer, 2012. "Towards a theory of policy timing," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 56(4), pages 583-596, October.
    19. Aalbers, Rob & Shestalova, Victoria & Kocsis, Viktória, 2013. "Innovation policy for directing technical change in the power sector," Energy Policy, Elsevier, vol. 63(C), pages 1240-1250.
    20. Thomas D. Pol & Ekko C. Ierland & Silke Gabbert, 2017. "Economic analysis of adaptive strategies for flood risk management under climate change," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 22(2), pages 267-285, February.

    More about this item

    Keywords

    Environmental Economics and Policy; Risk and Uncertainty;

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ancewp:249390. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/creauau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.