Large irreversible capital decisions are to be made. ROA quantifies the investment risk associated with uncertain future outcomes. It can Climate-risk probabilities are Real options therefore assess whether it is better to invest known, or adequate analysis (ROA) now or to wait or whether it is better to information is available. — invest in options that offer greater flexibility in Good-quality data for major the future. cost/benefit components are available. High uncertainty of climate RDM is a decision-support tool that is used in change has been signaled. situations of deep uncertainty. It uses A mix of quantitative and quantitative models, or scenario generators, Robust decision qualitative information is with data-mining algorithms, to evaluate how making (RDM) available. different strategies perform under large Non-market sectors are ensembles of scenarios reflecting different involved (for example plausible future conditions. ecosystems and health). Adaptation actions are likely Portfolio analysis helps developing portfolios of to be complementary in options, rather than of a single option. It reducing climate risks. Portfolio originated in the context of financial markets to analysis explore the potential for portfolios of financial Climate-risk probabilities are assets to maximize the financial return on known, or good information investments, subject to a given level of risk. is available. Adaptive management is a long-established and less formalized approach that uses a monitoring, research, evaluation and learning process to improve future management strategies. Adaptive High uncertainty exists. management/ A variation of the approach is to consider major Clear risk thresholds and adaptation biophysical, human, social or economic indicators are identified. turning points thresholds, and the MEDIATION project has developed such assessments using the 'adaptation turning points', looking at sociopolitical thresholds (that is, a formal policy objective or societal preference). There is a mix of quantitative AHP is a form of MCA that undertakes pairwise and qualitative information; comparisons using expert judgements to derive Analytic and of qualitative and priority scales. The method allows the analysis hierarchy quantitative data. of tangible and intangible elements together, process (AHP) allowing these to be traded off against each There is a need for other in a decisionmaking process. consensus-building. Source: Martin et al. 2009. Climate Change Indicators Among the most important and easily measurable mean climate change indicators are: annual and monthly temperatures; heat extremes number, frequency; mean – monthly and annual precipitations; heavy precipitations volume and time distribution –
Real options analysis (ROA) ROA quantifies the investment risk associated with uncertain future outcomes. It can therefore assess whether it is better to invest now or to wait — or whether it is better to invest in options that offer greater flexibility in the future. Large irreversible capital decisions are to be made. Climate-risk probabilities are known, or adequate information is available. Good-quality data for major cost/benefit components are available. Robust decision making (RDM) RDM is a decision-support tool that is used in situations of deep uncertainty. It uses quantitative models, or scenario generators, with data-mining algorithms, to evaluate how different strategies perform under large ensembles of scenarios reflecting different plausible future conditions. High uncertainty of climate change has been signaled. A mix of quantitative and qualitative information is available. Non-market sectors are involved (for example ecosystems and health). Portfolio analysis Portfolio analysis helps developing portfolios of options, rather than of a single option. It originated in the context of financial markets to explore the potential for portfolios of financial assets to maximize the financial return on investments, subject to a given level of risk. Adaptation actions are likely to be complementary in reducing climate risks. Climate-risk probabilities are known, or good information is available. Adaptive management/ adaptation turning points Adaptive management is a long-established and less formalized approach that uses a monitoring, research, evaluation and learning process to improve future management strategies. A variation of the approach is to consider major biophysical, human, social or economic thresholds, and the MEDIATION project has developed such assessments using the 'adaptation turning points', looking at sociopolitical thresholds (that is, a formal policy objective or societal preference). High uncertainty exists. Clear risk thresholds and indicators are identified. Analytic hierarchy process (AHP) AHP is a form of MCA that undertakes pairwise comparisons using expert judgements to derive priority scales. The method allows the analysis of tangible and intangible elements together, allowing these to be traded off against each other in a decisionmaking process. There is a mix of quantitative and qualitative information; and of qualitative and quantitative data. There is a need for consensus-building. Source: Martin et al. 2009. Climate Change Indicators Among the most important and easily measurable climate change indicators are: mean annual and monthly temperatures; heat extremes – number, frequency; mean monthly and annual precipitations; heavy precipitations – volume and time distribution