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Mitigating Global Warming: A Real Options Approach


Chesney, Marc; Lasserre, Pierre; Troja, Bruno (2017). Mitigating Global Warming: A Real Options Approach. Annals of Operations Research, 255(1-2):465-506.

Abstract

Mitigation and adaptation represent two solutions to the issue of global warming. While mitigation aims at reducing CO2 emissions and preventing climate change, adaptation encompasses a broad scope of techniques used to reduce the impacts of climate change once they have occurred. Both have direct costs on a country’s Gross Domestic Product, but costs also arise from temperature increases due to inaction. This paper introduces a tipping point in a real options model and analyzes optimal investment choices in mitigation and their timing.

Abstract

Mitigation and adaptation represent two solutions to the issue of global warming. While mitigation aims at reducing CO2 emissions and preventing climate change, adaptation encompasses a broad scope of techniques used to reduce the impacts of climate change once they have occurred. Both have direct costs on a country’s Gross Domestic Product, but costs also arise from temperature increases due to inaction. This paper introduces a tipping point in a real options model and analyzes optimal investment choices in mitigation and their timing.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Banking and Finance
Dewey Decimal Classification:330 Economics
Language:English
Date:August 2017
Deposited On:30 Aug 2017 12:36
Last Modified:30 Aug 2017 12:38
Publisher:Springer
ISSN:0254-5330
Publisher DOI:https://doi.org/10.1007/s10479-016-2258-5
Other Identification Number:merlin-id:13424

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