Kiel Working Papers, Kiel Institute for World Economics
No 1809:
Adaptation to Climate Change and Climate Variability: Do It Now or Wait and See?
Daiju Narita and Martin F. Quaas
Abstract: As growing attention is paid to climate change adaptation
as an actual policy issue, the significant meaning of climate variability
in adaptation decisions is beginning to be recognized. By using a real
option framework, we shed light on how climate change and climate
variability affect individuals’ (farmers’) investment decisions with regard
to adaptation. As a plausible case in which the delay carries policy
implications, we investigate farmers’ choices when adaptation involves the
use of an open-access resource (water). The results show that uncoordinated
farmers with a high risk aversion may under-adapt while farmers with a low
risk aversion would over-adapt under the same conditions. Private
adaptation should be supported or discouraged accordingly if farmers are
not convinced about the possibilities of collective resource management in
the long run
Keywords: Adaptation to climate change, climate variability, risk and uncertainty, real option, water, open-access resources; (follow links to similar papers)
JEL-Codes: D81,; Q20,; Q54; (follow links to similar papers)
31 pages, November 2012
Before downloading any of the electronic versions below
you should read our statement on
copyright.
Download GhostScript
for viewing Postscript files and the
Acrobat Reader for viewing and printing pdf files.
Downloadable files:
KWP%201809.pdf 
Download Statistics
Report other problems with accessing this service to Sune Karlsson ()
or Helena Lundin ().
Programing by
Design Joakim Ekebom
