Decision making under inherent uncertainty: does preference analysis play a role in the design of wetland adaptation to climate change?

The economic valuation of environmental policies’ social benefits has traditionally relied on the simplifying assumption that policy’s outcomes are certain rather than uncertain. However, the complexities inherent in ecosystems’ dynamics make the magnitude and timing of the environmental outcomes difficult to predict. The presence of knowledge uncertainty, which is controllable and predictable, but especially of inherent uncertainty, which is uncontrollable and unpredictable, can lead to consider as optimal policies being less effective in terms of outcomes, intensity or implementation timing. In this context, and with a focus on wetland adaptation to climate change, this study analyzes the potential effects of inherent uncertainty on the policy’s social desirability, where uncertainty is presented through different scenarios of probability of occurrence of climate change-derived impacts on wetlands’ dependent species. Although this type of uncertainty cannot be controlled for, results give evidence that preference analysis can inform decision-making when it comes to inherent uncertainty settings, especially when policy design revolves around adaptation to uncontrollable, environmental circumstances.