Application of real option analysis for planning under climate change uncertainty: a case study for evaluation of flood mitigation plans in Korea

With concerns regarding global climate change increasing, recent studies on adapting to nonstationary climate change recommended a different planning strategy that could spread risks. Uncertainty in global climate change should be considered in any decision-making processes for flood mitigation strategies, especially in areas within a monsoon climate regime. This study applied a novel planning method called real option analysis (ROA) to an important water resources planning practice in Korea. The proposed method can easily be applied to other watersheds that are threatened by flood risk under climate change. ROA offers flexibility for decision-makers to reflect uncertainty at every stage during the project planning period. We successfully implemented ROA using a binomial tree model, including two real options—delay and abandon—to evaluate flood mitigation alternatives for the Yeongsan River Basin in Korea. The priority ranking of the four alternatives between the traditional discount cash flow (DCF) and ROA remained the same; however, two alternatives that were assessed as economically infeasible using DCF, were economically feasible using ROA. The binomial decision trees generated in this study are expected to be informative for decision-makers to conceptualize their adaptive planning procedure.     

Accounting for risk and uncertainty in determining preferred strategies for adapting to future climate change

Individuals, businesses, and policymakers face the problem of selecting a preferred strategy for adapting a managed ecosystem to future climate change when there is risk and/or uncertainty about future climate change and its ecosystem impacts, and the conditional outcomes of adaptive strategies (i.e., performance of an adaptive strategy given a particular future climate change scenario occurs). Evaluation methods for this purpose are described for two cases; one in which the decision-maker can (climate risk case) and cannot (climate uncertainty case) assign probabilities to future climate change scenarios. Fuzzy sets are used to characterize uncertainty regarding both future climate change, and the conditional outcomes of adaptive strategies. The preferred conditional adaptive strategy for a future climate change scenario is determined by ordering the adaptive strategies for that scenario using a fuzzy set operation. Two methods are described for determining the adaptive strategy that is preferred across all climate change scenarios. The preferred overall adaptive strategy for the climate risk case is determined by maximizing a performance index for strategies. The preferred overall adaptive strategy for the climate uncertainty case is determined using the minimax regret criterion, which selects the strategy that minimizes the maximum loss in performance that can occur across all strategies and climate change scenarios. Ways for making the evaluation methods dynamic are considered.     

Climate change vulnerability assessments as catalysts for social learning: four case studies in south-eastern Australia

Technical assessments of vulnerability and/or risk are increasingly being undertaken to assess the impacts of climate change. Underlying this is the belief that they will bring clarity to questions regarding the scale of institutional investments required, plausible adaptation policies and measures, and the timing of their implementation. Despite the perceived importance of technical assessments in 'evidence-based' decision environments, assessments cannot be undertaken independent of values and politics, nor are they capable of eliminating the uncertainty that clouds decision-making on climate adaptation As such, assessments can trigger as many questions as they answer, leaving practitioners and stakeholders to question their value. This paper explores the value of vulnerability/risk assessments in climate change adaptation planning processes as a catalyst for learning in four case studies in Southeastern Australia. Data were collected using qualitative interviews with stakeholders involved in the assessments and analysed using a social learning framework. This analysis revealed that detailed and tangible strategies or actions often do not emerge directly from technical assessments. However, it also revealed that the assessments became important platforms for social learning. In providing these platforms, assessments present opportunities to question initial assumptions, explore multiple framings of an issue, generate new information, and galvanise support for collective actions. This study highlights the need for more explicit recognition and understanding of the important role social learning plays in climate change vulnerability assessments and adaptation planning more broadly.     

Climate change and forests in India: adaptation opportunities and challenges

Climate change is projected to lead to shift of forest types leading to irreversible damage to forests by rendering several species extinct and potentially affecting the livelihoods of local communities and the economy. Approximately 47% and 42% of tropical dry deciduous grids are projected to undergo shifts under A2 and B2 SRES scenarios respectively, as opposed to less than 16% grids comprising of tropical wet evergreen forests. Similarly, the tropical thorny scrub forest is projected to undergo shifts in majority of forested grids under A2 (more than 80%) as well as B2 scenarios (50% of grids). Thus the forest managers and policymakers need to adapt to the ecological as well as the socio-economic impacts of climate change. This requires formulation of effective forest management policies and practices, incorporating climate concerns into long-term forest policy and management plans. India has formulated a large number of innovative and progressive forest policies but a mechanism to ensure effective implementation of these policies is needed. Additional policies and practices may be needed to address the impacts of climate change. This paper discusses an approach and steps involved in the development of an adaptation framework as well as policies, strategies and practices needed for mainstreaming adaptation to cope with projected climate change. Further, the existing barriers which may affect proactive adaptation planning given the scale, accuracy and uncertainty associated with assessing climate change impacts are presented.     

The effectiveness of flood risk communication strategies and the influence of social networks—Insights from an agent-based model

Flood risk management is becoming increasingly important, because more people are settling in flood-prone areas, and flood risk is increasing in many regions due to extreme weather events associated with climate change. It has been proposed that appropriately designed flood risk communication campaigns can stimulate floodplain inhabitants to prepare for flooding, and encourage adaptation to climate change. However, such campaigns do not always result in the desired action, and the effectiveness of communication in raising flood risk awareness and improving flood preparedness has hardly been studied. We evaluate different flood risk communication strategies, using an agent-based modelling approach, which is especially suitable for examining the effect of communication on each individual, and how flood risk communication can propagate through an individual’s social network. Our modelling results show that tailored, people-centred, flood risk communication can be significantly more effective than the common approach of top-down government communication, even when tailored communication reaches fewer individuals. Furthermore, communication on how to protect against floods, in addition to providing information about flood risk, is much more effective than the traditional strategy of communicating only about flood risk. Another main finding is that a person’s social network can have a significant effect on whether or not individuals take protective action. This leads to the recommendation that flood risk communication should aim at exploiting this natural amplifying effect of social networks, for instance, through the use of social media.     

A Framework for Benefit-Cost Analysis of Adaptation to Climate Change and Climate Variability

The potential damages of climate change and climate variability are dependent upon the responses or adaptations that people make to their changing environment. By adapting the management of resources, the mix and methods of producing goods and services, choices of leisure activities, and other behavior, people can lessen the damages that would otherwise result. A framework for assessing the benefits and costs of adaptation to both climate change and climate variability is described in the paper. The framework is also suitable for evaluating the economic welfare effects of climate change, allowing for autonomous adaptation by private agents. The paper also briefly addresses complications introduced by uncertainty regarding the benefits of adaptation and irreversibility of investments in adaptation. When investment costs are irreversible and there is uncertainty about benefits, the usual net present value criterion for evaluating the investment gives the wrong decision. If delaying an adaptation project is possible, and if delay will permit learning about future benefits of adaptation, it may be preferable to delay the project even if the expected net present value is positive. Implications of this result for adaptation policy are discussed in the paper.     

Adaptive management of marine mega-fauna in a changing climate

Management of marine mega-fauna in a changing climate is constrained by a series of uncertainties, often related to climate change projections, ecological responses, and the effectiveness of strategies in alleviating climate change impacts. Uncertainties can be reduced over time through adaptive management. Adaptive management is a framework for resource conservation that promotes iterative learning-based decision making. To successfully implement the adaptive management cycle, different steps (planning, designing, learning and adjusting) need to be systematically implemented to inform earlier steps in an iterative way. Despite the critical role that adaptive management is likely to play in addressing the impacts of climate change on marine mega-fauna few managers have successfully implemented an adaptive management approach. We discuss the approaches necessary to implement each step of an adaptive management cycle to manage marine mega-fauna in a changing climate, highlighting the steps that require further attention to fully implement the process. Examples of sharks and rays (Selachimorpha and Batoidea) on the Great Barrier Reef and little penguins, Eudyptula minor, in south-eastern Australia are used as case studies. We found that successful implementation of the full adaptive management cycle to marine mega-fauna needs managers and researchers to: (1) obtain a better understanding of the capacity of species to adapt to climate change to inform the planning step; (2) identify strategies to directly address impacts in the marine environment to inform the designing step; and (3) develop systematic evaluation and monitoring programs to inform the learning step. Further, legislation needs to flexible to allow for management to respond.     

Climate change and local level disaster risk reduction planning: need, opportunities and challenges

The field of climate change is full of uncertainties that are limiting strategic disaster risk reduction planning. In this paper, however, we argued that there is lot to do before we get our hands on reliable estimates of future climate change impacts. It includes bringing together different stakeholders in a framework suggested in this paper, developing case studies that reflect long-term local impacts of climate change, capacity building of local stakeholders that enables them to take decisions under uncertainty etc. We proposed a simple scheme that brings together climate, disaster and policy community together to start a dialogue in a run-up to understanding wider aspects of long-term risk reduction at local level. Strategic thinking, which has only been restricted to national and regional planning to date, needs to be inculcated in local level disaster risk reduction and policy personnel as well. There is a need to move from the attitude of considering local level players as ‘implementers’ to ‘innovators’ for which developing a network of self learning and evolving organizations are required at the local level.     

Changing climate,changing frames: Dutch water policy frame developments in the context of a rise and fall of attention to climate change

Water management and particularly flood defence have a long history of collective action in low-lying countries like the Netherlands. The uncertain but potentially severe impacts of the recent climate change issue (e.g. sea level rise, extreme river discharges, salinisation) amplify the wicked and controversial character of flood safety policy issues. Policy proposals in this area generally involve drastic infrastructural works and long-term investments. They face the difficult challenge of framing problems and solutions in a publicly acceptable manner in ever changing circumstances. In this paper, we analyse and compare (1) how three key policy proposals publicly frame the flood safety issue, (2) the knowledge referred to in the framing and (3) how these frames are rhetorically connected or disconnected as statements in a long-term conversation. We find that (1) framings of policy proposals differ in the way they depict the importance of climate change, the relevant timeframe and the appropriate governance mode; (2) knowledge is selectively mobilised to underpin the different frames and (3) the frames about these proposals position themselves against the background of the previous proposals through rhetorical connections and disconnections. Finally, we discuss how this analysis hints at the importance of processes of powering and puzzling that lead to particular framings towards the public at different historical junctures.     

全球气候变化下的中国粮食安全问题研究

粮食是人类生存的基础,保障粮食安全是“2030年可持续发展议程”的重要目标之一。论文基于粮食系统视角,从全球气候变化对粮食系统的作用、保障粮食安全对全球气候变化的影响,以及应对全球气候变化的粮食安全适应性策略出发,揭示粮食安全与全球气候变化的相互作用,系统梳理全球气候变化下的中国粮食安全问题。研究结果表明：1）全球气候变化导致粮食系统不确定性增加,且对中国粮食生产的影响加剧;2）粮食需求是全球气候变化的主要驱动力,粮食生产要素的重新配置加剧了全球气候变化;3）多尺度有机结合应对全球气候变化保障粮食安全需在微观上“藏粮于技”实现提质增效,在中观上“藏粮于地”注重生态建设,在宏观上坚持市场为主导完善粮食政策体系。全球气候变化背景下,保障粮食安全研究呈现从单一学科、单一维度、单一手段向依靠多学科开展多尺度、多要素、系统综合集成研究保障粮食安全转变,从高碳粮食系统向低碳高效粮食系统转变的趋势。     

A multi-criteria geographic information systems approach for the measurement of vulnerability to climate change

A flexible procedure for the development of a multi-criteria composite index to measure relative vulnerability under future climate change scenarios is presented. The composite index is developed using the Weighted Ordered Weighted Average (WOWA) aggregation technique which enables the selection of different levels of trade-off, which controls the degree to which indicators are able to average out others. We explore this approach in an illustrative case study of the United States (US), using future projections of widely available indicators quantifying flood vulnerability under two scenarios of climate change. The results are mapped for two future time intervals for each climate scenario, highlighting areas that may exhibit higher future vulnerability to flooding events. Based on a Monte Carlo robustness analysis, we find that the WOWA aggregation technique can provide a more flexible and potentially robust option for the construction of vulnerability indices than traditionally used approaches such as Weighted Linear Combinations (WLC). This information was used to develop a proof-of-concept vulnerability assessment to climate change impacts for the US Army Corps of Engineers. Lessons learned in this study informed the climate change screening analysis currently under way.     

Adapting to Climate Change in Africa

The intersection of present vulnerability and the prospect of climate change in Africa warrants proactive action now to reduce the risk of large-scale, adverse impacts. The process of planning adaptive strategies requires a systematic evaluation of priorities and constraints, and the involvement of stakeholders. An overview of climate change in Africa and case studies of impacts for agriculture and water underlie discussion of a typology of adaptive responses that may be most effective for different stakeholders. The most effective strategies are likely to be to reduce present vulnerability and to enhance a broad spectrum of capacity in responding to environmental, resource and economic perturbations. In some cases, such as design of water systems, an added risk factor should be considered.     

A methodological framework to operationalize climate risk management: managing sovereign climate-related extreme event risk in Austria

Despite considerable uncertainties regarding the exact contribution of anthropogenic climate change to disaster risk, rising losses from extreme events have highlighted the need to comprehensively address climate-related risk. This requires linking climate adaptation to disaster risk management (DRM), leading to what has been broadly referred to as climate risk management (CRM). While this concept has received attention in debate, important gaps remain in terms of operationalizing it with applicable methods and tools for specific risks and decision-contexts. By developing and applying a methodological approach to CRM in the decision context of sovereign risk (flooding) in Austria we test the usefulness of CRM, and based on these insights, inform applications in other decision contexts. Our methodological approach builds on multiple lines of evidence and methods. These comprise of a broad stakeholder engagement process, empirical analysis of public budgets, and risk-focused economic modelling. We find that a CRM framework is able to inform instrumental as well as reflexive and participatory debate in practice. Due to the complex interaction of social–ecological systems with climate risks, and taking into account the likelihood of future contingent climate-related fiscal liabilities increasing substantially as a result of socioeconomic developments and climate change, we identify the need for advanced learning processes and iterative updates of CRM management plans. We suggest that strategies comprising a portfolio of policy measures to reduce and manage climate-related risks are particularly effective if they tailor individual instruments to the specific requirements of different risk layers.     

Linking corporate climate adaptation strategies with resilience thinking

Within modern society, business organizations have a co-evolutionary relationship with society and ecosystems. Business organizations face highly diverse risks which they have to recognize, reflect on and handle. Climate change and its impacts clarify the need for managing overall system risk. Research has shown that climate vulnerability of business organizations in the German food industry is characterized by impacts that, in particular, affect business organizations indirectly. Indirect climate change caused impacts are complex, uncertain and characterized by a high degree of unpredictability. They focus on the derived social, ecological, economic and cultural consequences of the direct physical impacts from a worldwide perspective. This paper shows that introducing resilience thinking helps to identify strategic risks and opportunities coping with climate change caused impacts in sense of corporate climate adaptation strategies. Furthermore, it is shown from a strategic management perspective that mitigation is a profound element of long term adaptation strategies.     

Assessing river flood risk and adaptation in Europe—review of projections for the future

Flood damages have exhibited a rapid upward trend, both globally and in Europe, faster than population and economic growth. Hence, vigorous attempts of attribution of changes have been made. Flood risk and vulnerability tend to change over many areas, due to a range of climatic and nonclimatic impacts whose relative importance is site-specific. Flooding is a complex phenomenon and there are several generating mechanisms, among others intense and/or long-lasting precipitation, snowmelt, ice jam. Projected climate-driven changes in future flood frequency are complex, depending on the generating mechanism, e.g., increasing flood magnitudes where floods result of heavy rainfall and possibly decreasing magnitudes where floods are generated by spring snowmelt. Climate change is likely to cause an increase of the risk of riverine flooding across much of Europe. Projections of flood hazard in Europe based on climatic and hydrological models, reviewed in this paper, illustrate possible changes of recurrence of a 100-year flood (with probability of exceedance being 1-in-100 years) in Europe. What used to be a 100-year flood in the control period is projected to become either more frequent or less frequent in the future time horizon of concern. For a large part of the continent, large flooding is projected to become more commonplace in future, warmer climate. Due to the large uncertainty of climate projections, it is currently not possible to devise a scientifically-sound procedure for redefining design floods (e.g. 100-year flood) in order to adjust flood defenses. For the time being, we recommend to adjust design floods using a “climate change factor” approach.     

Estimating changes in flood risks and benefits of non-structural adaptation strategies - a case study from Tyrol,Austria

Flood damage has increased significantly and is expected to rise further in many parts of the world. For assessing potential changes in flood risk, this paper presents an integrated model chain quantifying flood hazards and losses while considering climate and land use changes. In the case study region, risk estimates for the present and the near future illustrate that changes in flood risk by 2030 are relatively low compared to historic periods. While the impact of climate change on the flood hazard and risk by 2030 is slight or negligible, strong urbanisation associated with economic growth contributes to a remarkable increase in flood risk. Therefore, it is recommended to frequently consider land use scenarios and economic developments when assessing future flood risks. Further, an adapted and sustainable risk management is necessary to encounter rising flood losses, in which non-structural measures are becoming more and more important. The case study demonstrates that adaptation by non-structural measures such as stricter land use regulations or enhancement of private precaution is capable of reducing flood risk by around 30 %. Ignoring flood risks, in contrast, always leads to further increasing losses—with our assumptions by 17 %. These findings underline that private precaution and land use regulation could be taken into account as low cost adaptation strategies to global climate change in many flood prone areas. Since such measures reduce flood risk regardless of climate or land use changes, they can also be recommended as no-regret measures.     

Nuclear power and post-2012 energy and climate change policies

At present there is no binding agreement (at a global level) to address the risk of anthropogenic climate change after 2012. Disagreements abound with respect to a post-2012 climate change agreement, on issues such as economic development, policy criteria, environmental effectiveness, cost-effectiveness, equity, dynamic flexibility, complementarity, enforceability and so on. One such disagreement is whether or not nuclear power should play a role in a post-2012 climate change agreement. This qualitative analysis explores the conditions under which nuclear power could contribute to addressing climate change in post-2012 architectures. It reveals that – given the right framework conditions – some architectures, like ‘cap and trade’ regimes or ‘policies and measures’ can improve the competitiveness of nuclear power plants, while others are unlikely to provide incentives for nuclear energy development in the short to medium term, such as adaptation and technology cooperation. Overall, the study concludes that post-2012 climate change policy should aim at providing policy flexibility without compromising technology flexibility. For example, the provision of long-term commitment periods has the potential to enable better investments in existing low-carbon technologies but stifle the policy flexibility that political decision makers are often keen to retain so that they can respond more quickly to new scientific evidence or advances in clean technology development.     

Assessing local climate vulnerability and winegrowers’ adaptive processes in the context of climate change

Adaptation to climate change is a major challenge facing the viticulture sector. Temporally, adaptation strategies and policies have to address potential impacts in both the short- and long term, whereas spatially, place-based and context-specific adaptations are essential. To help inform decision-making on climate change adaptation, this study adopted a bottom-up approach to assess local climate vulnerability and winegrowers’ adaptive processes in two regulated wine-producing areas in the Anjou-Saumur wine growing sub-region, France. The data used for this study were collected through individual semi-structured interviews with 30 winegrowers. With a focus on wine quality, climate-related exposure, and sensitivity were dependent on many contextual factors (e.g., northern geographical position, wine regulatory frameworks, local environmental features) interacting with the regional oceanic climate. Climate and other non-climate-related variables brought about important changes in winegrowers’ management practices, varying in time and space. This ongoing process in decision-making enhanced winegrowers’ adaptive responses, which were primarily reactive (e.g., harvesting, winemaking) or anticipatory (e.g., canopy and soil management) to short-term climate conditions. Winegrowers described changing trends in climate- and grapevine (Vitis) -related variables, with the latter attributed to regional climate changes and evolving management practices. Regarding future climate trends, winegrowers’ displayed great uncertainty, placing the most urgent adaptation priority on short-term strategies, while changing grapevine varieties and using irrigation were identified as last resort strategies. The study concluded by discussing the implications of these findings in the context of climate change adaptation in viticulture.     

Historical assessment of Chinese and Japanese flood management policies and implications for managing future floods

Floods are among the world's most devastating natural disasters, causing immense damage and accounting for a large number of deaths world-wide. Good flood management policies play an extremely important role in preventing floods. It is well known that China has more than 5000 years of experience in flood management policy beginning with the reign of DaYu and Gun. Although culturally related, Japanese flood management developed differently from that of China. Under rapid development of civil engineering technology, flood management was achieved primarily through the construction of dams, levees and other structures. These structures were never adequate to stop all floods, and recent climate change driven extreme events are ever more frequently overwhelming such infrastructure. It is important to take a historical perspective of Japanese and Chinese flood management in order to better manage increasingly frequent extreme events and climate change. We present insights taken from an historical overview of Japanese and Chinese flood management policies in order to guide future flood risk management policy.     

Individual preferences for reducing flood risk to near zero through elevation

Climate change is expected to increase the frequency and intensity of natural disasters. Adaptation investments are required in order to limit the projected increase in natural disaster risks. Adaptation measures can reduce risk partially or completely eliminate risk. The literature on behavioural economics suggests that individuals rarely undertake measures that limit risk partially, while they may place a considerable value on measures that reduce risk to zero. This is studied for a case of adaptation to climate change and its effects on flood risk in the Netherlands. In particular, we examine whether households are willing to invest in elevating newly built structures when this is framed as eliminating flood risk. The results indicate that a majority of homeowners (52%) is willing to make a substantial investment of €10,000 to elevate a new house to a level that is safe to flooding. Differences between willingness to pay (WTP) for flood insurance and WTP for risk elimination through elevation indicate that individuals place a considerable value on the latter adaptation option. This study estimates that the “safety premium” which individuals place on risk elimination is approximately between €35 and €45 per month. The existence of a safety premium has important implications for the design of climate change adaptation policies. The decision to invest in elevating homes is significantly correlated with the expected negative effects of climate change, perceptions of flood risks, individual risk attitudes, and living close to a main river.