Mitigating Global Warming: A Real Options Approach

Marc Chesney, Pierre Lasserre and Bruno Troja

Cahiers de recherche from Centre interuniversitaire de recherche en économie quantitative, CIREQ

Abstract: Mitigation and adaptation represent two solutions to the issue of global warming. While mitigation aims at reducing CO2 emissions and preventing climate change, adaptation encompasses a broad scope of techniques used to reduce the impacts of climate change once they have occurred. Both have direct costs on a country’s Gross Domestic Product, but costs also arise from temperature increases due to inaction. This paper introduces a tipping point in a real options model and analyzes optimal investment choices in mitigation and their timing.

Keywords: adaptation; mitigation; real options; delay; tipping point; climate change; CO2; gross domestic product (search for similar items in EconPapers)
Pages: 53 pages
Date: 2016
New Economics Papers: this item is included in nep-agr, nep-ene, nep-env and nep-ger
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Related works:
Journal Article: Mitigating global warming: a real options approach (2017)
Working Paper: Mitigating Global Warming: A Real Option Approach (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:mtl:montec:08-2016

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