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Characterizing uncertain sea-level rise projections to support investment decisions

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  • Ryan L Sriver
  • Robert J Lempert
  • Per Wikman-Svahn
  • Klaus Keller

Abstract

Many institutions worldwide are considering how to include uncertainty about future changes in sea-levels and storm surges into their investment decisions regarding large capital infrastructures. Here we examine how to characterize deeply uncertain climate change projections to support such decisions using Robust Decision Making analysis. We address questions regarding how to confront the potential for future changes in low probability but large impact flooding events due to changes in sea-levels and storm surges. Such extreme events can affect investments in infrastructure but have proved difficult to consider in such decisions because of the deep uncertainty surrounding them. This study utilizes Robust Decision Making methods to address two questions applied to investment decisions at the Port of Los Angeles: (1) Under what future conditions would a Port of Los Angeles decision to harden its facilities against extreme flood scenarios at the next upgrade pass a cost-benefit test, and (2) Do sea-level rise projections and other information suggest such conditions are sufficiently likely to justify such an investment? We also compare and contrast the Robust Decision Making methods with a full probabilistic analysis. These two analysis frameworks result in similar investment recommendations for different idealized future sea-level projections, but provide different information to decision makers and envision different types of engagement with stakeholders. In particular, the full probabilistic analysis begins by aggregating the best scientific information into a single set of joint probability distributions, while the Robust Decision Making analysis identifies scenarios where a decision to invest in near-term response to extreme sea-level rise passes a cost-benefit test, and then assembles scientific information of differing levels of confidence to help decision makers judge whether or not these scenarios are sufficiently likely to justify making such investments. Results highlight the highly-localized and context dependent nature of applying Robust Decision Making methods to inform investment decisions.

Suggested Citation

  • Ryan L Sriver & Robert J Lempert & Per Wikman-Svahn & Klaus Keller, 2018. "Characterizing uncertain sea-level rise projections to support investment decisions," PLOS ONE, Public Library of Science, vol. 13(2), pages 1-35, February.
    • Handle: RePEc:plo:pone00:0190641
    DOI: 10.1371/journal.pone.0190641
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    References listed on IDEAS

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    1. Robert J. Nicholls & Susan E. Hanson & Jason A. Lowe & Richard A. Warrick & Xianfu Lu & Antony J. Long, 2014. "Sea‐level scenarios for evaluating coastal impacts," Wiley Interdisciplinary Reviews: Climate Change, John Wiley & Sons, vol. 5(1), pages 129-150, January.
    2. Howard Kunreuther & Geoffrey Heal & Myles Allen & Ottmar Edenhofer & Christopher B. Field & Gary Yohe, 2013. "Risk management and climate change," Nature Climate Change, Nature, vol. 3(5), pages 447-450, May.
    3. John Hunter, 2012. "A simple technique for estimating an allowance for uncertain sea-level rise," Climatic Change, Springer, vol. 113(2), pages 239-252, July.
    4. Maya K. Buchanan & Robert E. Kopp & Michael Oppenheimer & Claudia Tebaldi, 2016. "Allowances for evolving coastal flood risk under uncertain local sea-level rise," Climatic Change, Springer, vol. 137(3), pages 347-362, August.
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    Cited by:

    1. Jasper Verschuur & Raghav Pant & Elco Koks & Jim Hall, 2022. "A systemic risk framework to improve the resilience of port and supply-chain networks to natural hazards," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 24(3), pages 489-506, September.
    2. Emily Ho & David V. Budescu & Valentina Bosetti & Detlef P. Vuuren & Klaus Keller, 2019. "Not all carbon dioxide emission scenarios are equally likely: a subjective expert assessment," Climatic Change, Springer, vol. 155(4), pages 545-561, August.
    3. Robert E. Kopp, 2021. "Land-grant lessons for Anthropocene universities," Climatic Change, Springer, vol. 165(1), pages 1-12, March.
    4. Jesse M. Keenan & Jacob T. Bradt, 2020. "Underwaterwriting: from theory to empiricism in regional mortgage markets in the U.S," Climatic Change, Springer, vol. 162(4), pages 2043-2067, October.

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