You are here: Home / Toolbox / Details
A further challenge for adaptation decision making arises in terms of estimating the value of waiting for more information before making a decision. This is particularly the case when the set of options includes options with long investment horizons, or when a decision is considering adaptation to mid- to long-term hazards, and when the options considered are flexible.

An option is flexible if it allows to switch to other options that might be preferable in the future once more is known about the changing climate. If one or more options are flexible over the lifetime of the decision, then the analyst can incorporate this into her appraisal of options, and the criterion of flexibility of options becomes important. More knowledge may become available through direct observations and improved scientific knowledge. For example, the analyst may know that a study on the impacts of sea level rise in her region will be completed in two years. Her consideration of options for coastal defence should include the expectation that improved probabilistic knowledge will become available.

When at least one option is flexible, a set of approaches uses the criterion of flexibility to decide between alternative strategies. Flexible options are favored over non flexible ones and decisions are delayed to keep future options open (Hallegate, 2009). The adaptation pathways approach implements the criterion of flexibility by characterizing alternative strategies in terms of two attributes: i) adaptation tipping points (ATP), which are points beyond which strategies are no longer effective (Kwadijk et al., 2010), and ii) what alternative strategies are available once a tipping point has been reached (Haasnoot et al., 2012). Importantly, the exact time when an ATP is reached does not matter, it is rather the flexibility of having alternative strategies available that drives the decision. Prominent applications of this approach include the Thames Estuary 2100 Plan (Lowe et al., 2009; Penning-Roswell et al. 2011), the Dutch Delta Programme (Kabat et al., 2009) and the New York City Panel on Climate Change (Rosenzweig et al., 2011).

Exemplary methods and tools

NameDescriptionReferences
Adaptation pathways The adaptation pathways approach implements the criterion of flexibility by characterizing alternative strategies in terms of two attributes: i) adaptation tipping points (ATP), which are points beyond which strategies are no longer effective (Kwadijk et al., 2010), and ii) what alternative strategies are available once a tipping point has been reached (Haasnoot et al., 2012). Importantly, the exact time when an ATP is reached does not matter, it is rather the flexibility of having alternative strategies available that drives the decision. Haasnoot, M., Middelkoop, H., Offermans, A., Beek, E., & Deursen, W. A. v. (2012). Exploring pathways for sustainable water management in river deltas in a changing environment. Climatic Change, 115(3-4), 795-819. doi: 10.1007/s10584-012-0444-2

Pathfinder

Related decision tree of the Pathfinder:

Decision tree: Formal appraisal of options

Toolbox detail pages

Access Toolbox detail pages to learn more on selected methods and tools.

Real options analysis