Irreversible decision making. Uncertainty. Flexibility. These are issues that cannot be solved by standard investment evaluation methods. Maybe a real options analysis provides the solution!
To drill or not to drill for shale gas? To subsidize or not to subsidize CO2 transportation networks? To invest or not to invest in biodiversity? To adapt or not to adapt to climate change? Whether the assets are tangible or not, on a company level or a policy level: also in environmental economics irreversible investment decisions under uncertainty need to be made. Or postponed?
This blog is about applying and developing real options models in environmental and ecological economics.
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