Module 4: Risk Under Deep Uncertainty

Real Options

The first of the three decision models we’ll look at is the Real Options approach. Real options focus on the value of preserving future choices by choosing strategy pathways that maximize flexibility. The example used in this video is based on an example provided in Her Majesty’s Treasury’ Supplementary Green Book Guidance (2009), as reported in The Mediation Project. (n.d.). Decision support methods for climate change adaptation: Real options analysis.

Video attribution: “Real Options” by Todd Thexton, Financial Impact of Climate Change, Adaptation Learning Network is licensed under CC BY 4.0.

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Financial Impact of Climate Change Copyright © 2021 by Todd Thexton is licensed under a Creative Commons Attribution 4.0 International License, except where otherwise noted.

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