Abstract
AbstractAssessing climate risk and its potential impacts on our cities and economies is of fundamental importance. Extreme weather events, such as hurricanes, floods, and storm surges can lead to catastrophic damages. We propose a flexible approach based on real options analysis and extreme value theory, which enables the selection of optimal adaptation pathways for a portfolio of climate adaptation projects. We model the severity of extreme sea level events using the block maxima approach from extreme value theory, and then develop a real options framework, factoring in climate change, sea level rise uncertainty, and the growth in asset exposure. We then apply the proposed framework to a real-world problem, considering sea level data as well as different adaptation investment options for New York City. Our research can assist governments and policy makers in taking informed decisions about optimal adaptation pathways and more specifically about reducing flood and storm surge risk in a dynamic settings.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
