Decision making under uncertainties for adapting to climate change in project environmental assessments

The views, conclusions and recommendations expressed herein are those of the authors and do not represent the views of the Canadian Environmental Assessment Agency or the Government of Canada. [...] Implementation of these methods requires the choice of appropriate sets of scenarios and adaptation options, the assessment of the impacts of the combinations of options with the future climate scenarios, an understanding of the attitudes of the decision maker and other stakeholders toward risks and uncertainties, the application of corresponding decision rules, and effective communication of the [...] Moreover, the guidelines go on to say: “Where the risks associated with the impacts of climate change on a project are of a private sector nature alone (for example, affecting the long-term profitability of the project), the proponent can choose to absorb this risk. [...] In contrast to augmenting the project’s ability to handle increased climate variability, it may be possible to modify the effects of the variability on the project. [...] If the market price of the stock is above the strike price, it will be attractive to exercise the option and then sell the stock at the higher market price.