Quasi-option value and climate policy choices

Abstract : In the climate change issue, the environmental irreversibility (risk of an acceleration of mitigation policies if the worse happen) has to be balanced with the investment irreversibility (risk of over-cautious policies). To explore this balance, we define an option value for a precautionary climate policy. Using the simplest decision-making model, we expose how option value relates to the expected value of future information. Using quantitative data from an integrated as sessment model, we find that most of the times the environmental irreversibility dominates the investment irreversibility. For all cases explored here, the order of magnitude of the option value was significant, about 50% of the opportunity cost.
Type de document :
Article dans une revue
Energy Economics, Elsevier, 1998, 20, pp.599-620
Liste complète des métadonnées

https://halshs.archives-ouvertes.fr/halshs-00002457
Contributeur : Minh Ha-Duong <>
Soumis le : jeudi 5 août 2004 - 14:24:08
Dernière modification le : jeudi 29 septembre 2016 - 01:27:49
Document(s) archivé(s) le : lundi 29 mars 2010 - 21:34:01

Fichier

Identifiants

  • HAL Id : halshs-00002457, version 1

Collections

Citation

Minh Ha-Duong. Quasi-option value and climate policy choices. Energy Economics, Elsevier, 1998, 20, pp.599-620. <halshs-00002457>

Partager

Métriques

Consultations de
la notice

332

Téléchargements du document

312