Real options analysis for valuation of climate adaptation pathways with application to transit infrastructure.

Climate change and sea-level rise (SLR) are expected to increase the frequency and intensity of coastal flood events, posing risks to coastal communities and infrastructure. While regional climate adaptation investments can provide substantive flood protection, existing plans often neglect uncertainty in future climate conditions and adaptation performance, consequently neglecting the option value of flexibly implementing proposed projects. Addressing this gap, we develop and employ a generalizable real options analysis (ROA) valuation framework that considers how uncertainty in adaptation project costs, SLR, flood severity, and flood losses inform the full range of adaptation performance outcomes.

Deep Uncertainties in Sea-Level Rise and Storm Surge Projections: Implications for Coastal Flood Risk Management.

Sea levels are rising in many areas around the world, posing risks to coastal communities and infrastructures. Strategies for managing these flood risks present decision challenges that require a combination of geophysical, economic, and infrastructure models. Previous studies have broken important new ground on the considerable tensions between the costs of upgrading infrastructure and the damages that could result from extreme flood events.

Impacts of representing sea-level rise uncertainty on future flood risks: An example from San Francisco Bay.

Rising sea levels increase the probability of future coastal flooding. Many decision-makers use risk analyses to inform the design of sea-level rise (SLR) adaptation strategies. These analyses are often silent on potentially relevant uncertainties.