IDEAS home Printed from https://ideas.repec.org/p/ags/aare09/47615.html
   My bibliography  Save this paper

Adapting More Cleverly To Climate Change By Using ‘Real Options’ To Address The Uncertainties

Author

Listed:
  • Dobes, Leo

Abstract

Scientists consider that some climate change is already inevitable, even if anthropogenic greenhouse emissions are stabilised immediately. Adaptation measures are therefore needed, irrespective of any mitigation action. But policy discussion is focussed on deterministic responses, generally risk-based "worst case‟ scenarios. An example is the development of more stringent standards for buildings and for coastal development. Such "climate proofing‟ is misconceived in the face of the huge uncertainties involved. Economists need to promote more rational policy frameworks that draw on cost-benefit analysis, including the use of "real options‟ to minimise the cost to society of adapting to climate change.

Suggested Citation

  • 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.
  • Handle: RePEc:ags:aare09:47615
    DOI: 10.22004/ag.econ.47615
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/47615/files/AARES%202009%20%20CC%20adaptation%20and%20real%20options%20final%20%20170209%20pdfr.pdf
    Download Restriction: no

    File URL: https://libkey.io/10.22004/ag.econ.47615?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
    ---><---

    References listed on IDEAS

    as
    1. Nordhaus, William D, 1991. "To Slow or Not to Slow: The Economics of the Greenhouse Effect," Economic Journal, Royal Economic Society, vol. 101(407), pages 920-937, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sanderson, Todd & Ahmadi-Esfahani, Fredoun Z., 2010. "Climate change and Australia’s comparative advantage in broadacre agriculture," 2010 Conference, August 26-27, 2010, Nelson, New Zealand 96493, New Zealand Agricultural and Resource Economics Society.
    2. 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.
    3. Dobes, Leo, 2012. "Adaptation to Climate Change: Formulating Policy under Uncertainty," Working Papers 249390, Australian National University, Centre for Climate Economics & Policy.
    4. Andrew Macintosh, 2013. "Coastal climate hazards and urban planning: how planning responses can lead to maladaptation," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 18(7), pages 1035-1055, October.

    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. Döll, Sebastian, 2009. "Climate change impacts in computable general equilibrium models: An overview," HWWI Research Papers 1-26, Hamburg Institute of International Economics (HWWI).
    2. Frederick Ploeg & Aart Zeeuw, 2019. "Pricing Carbon and Adjusting Capital to Fend Off Climate Catastrophes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 72(1), pages 29-50, January.
    3. Grubb, Michael & Chapuis, Thierry & Duong, Minh Ha, 1995. "The economics of changing course : Implications of adaptability and inertia for optimal climate policy," Energy Policy, Elsevier, vol. 23(4-5), pages 417-431.
    4. Garth Heutel, 2012. "How Should Environmental Policy Respond to Business Cycles? Optimal Policy under Persistent Productivity Shocks," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(2), pages 244-264, April.
    5. Khanna, Neha & Chapman, Duane, 1997. "Climate Policy and Petroleum Depletion in an Optimal Growth Framework," Staff Papers 121172, Cornell University, Department of Applied Economics and Management.
    6. Richard S.J. Tol, 2003. "The Marginal Costs Of Carbon Dioxide Emissions: An Assessment Of The Uncertainties," Working Papers FNU-19, Research unit Sustainability and Global Change, Hamburg University, revised Apr 2003.
    7. van der Ploeg, Frederick & Rezai, Armon, 2017. "Cumulative emissions, unburnable fossil fuel, and the optimal carbon tax," Technological Forecasting and Social Change, Elsevier, vol. 116(C), pages 216-222.
    8. Bhardwaj, Chandan & Axsen, Jonn & Kern, Florian & McCollum, David, 2020. "Why have multiple climate policies for light-duty vehicles? Policy mix rationales, interactions and research gaps," Transportation Research Part A: Policy and Practice, Elsevier, vol. 135(C), pages 309-326.
    9. Nahid Masoudi & Marc Santugini & Georges Zaccour, 2016. "A Dynamic Game of Emissions Pollution with Uncertainty and Learning," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 64(3), pages 349-372, July.
    10. Nunes, P.A.L.D. & Nijkamp, P., 2011. "Biodiversity: Economic perspectives," Serie Research Memoranda 0002, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    11. Oliver Fromm, 2000. "Ecological Structure and Functions of Biodiversity as Elements of Its Total Economic Value," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 16(3), pages 303-328, July.
    12. Fullerton, Don & Metcalf, Gilbert E., 2002. "Cap and trade policies in the presence of monopoly and distortionary taxation," Resource and Energy Economics, Elsevier, vol. 24(4), pages 327-347, November.
    13. Caetano, Marco Antonio Leonel & Gherardi, Douglas Francisco Marcolino & Yoneyama, Takashi, 2008. "Optimal resource management control for CO2 emission and reduction of the greenhouse effect," Ecological Modelling, Elsevier, vol. 213(1), pages 119-126.
    14. Rick van der Ploeg & Armon Rezai, 2018. "Simple Rules for Climate Policy and Integrated Assessment," CESifo Working Paper Series 7207, CESifo.
    15. Paul Baer & Clive L Spash, 2008. "Cost-Benefit Analysis of Climate Change: Stern Revisited," Socio-Economics and the Environment in Discussion (SEED) Working Paper Series 2008-07, CSIRO Sustainable Ecosystems.
    16. Erickson, Gary M., 2014. "Advertising, economic development, and global warming," Economic Modelling, Elsevier, vol. 41(C), pages 119-123.
    17. Koichi Yamaura & Shin Sakaue & Toyoaki Washida, 2017. "An assessment of global warming and biodiversity: CGE EMEDA analyses," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 19(2), pages 405-426, April.
    18. Obernhofer, Ulrich & Rennings, Klaus & Sahin, Bedia, 2006. "The impacts of the European Emissions Trading Scheme on competitiveness and employment in Europe: A literature review," ZEW Expertises, ZEW - Leibniz Centre for European Economic Research, number 111466, March.
    19. Jonghyun Yoo & Robert Mendelsohn, 2018. "Sensitivity Of Mitigation To The Optimal Global Temperature: An Experiment With Dice," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 9(02), pages 1-8, May.
    20. Bickel, Peter & Schmid, Stephan & Friedrich, Rainer, 2005. "Environmental Costs," Research in Transportation Economics, Elsevier, vol. 14(1), pages 185-209, January.

    More about this item

    Keywords

    Environmental Economics and Policy;

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:aare09:47615. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/aaresea.html .

    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/aaresea.html .

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.