Adapting long-lived investments under climate change uncertainty
研究了在气候变化不确定下，投资设计是否应更稳健，发现短期投资在气候变快时稳健性降低、不确定性高时提高，长期投资则相反，对基础设施规划者有参考价值。
Does climate change adaptation require that investments are designed to be more robust? What about when climate change is more uncertain? What if the climate changes faster? This decision problem is difficult if the design of the investments is irreversible for their lifetime, for instance, in the construction industry. We study an irreversible design decision when the investment starts, combined with an irreversible option to abandon. The design determines the investment’s robustness to sustain detrimental conditions. We find that for short-lived investments, optimal robustness decreases if the climate changes faster, and increases if uncertainty is higher. For long-lived investments, these effects reverse. This has implications for decision makers who plan infrastructure adaptation, for instance, that adverse climate change does not require more robust investments under the identified circumstances.