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Hurry Up Or Wait: Are Private Investments In Climate Change Adaptation Delayed?

Author

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  • CHARLES SIMS

    (Howard H. Baker Jr. Center for Public Policy and Department of Economics, University of Tennessee, 1640 Cumberland Ave, Knoxville, TN 37996-3340, US)

  • SARAH E. NULL

    (��Department of Watershed Sciences, Utah State University, 5210 Old Main Hill, NR 210, Logan, UT. 84322-5210, US)

  • JOSUE MEDELLIN-AZUARA

    (��Department of Civil and Environmental Engineering, University of California, Merced, USA)

  • AUGUSTINA ODAME

    (�School of Transnational Governance, European University Institute, Italy)

Abstract

Adaptation gaps arise when observed adaptation to climate change is slower than perceived adaptation potential. Two common explanations for adaptation gaps are (1) private parties failing to recognize that the climate is changing and (2) the cost of adaptation is higher than commonly believed. This paper shows how these two explanations are linked and that the likelihood and duration of adaptation gaps depend on whether climate change is characterized by stationary or non-stationary dynamics. Using an investment in water-saving irrigation in California’s Central Valley as an illustrative example, we find little evidence that failing to account for climate change would explain adaptation gaps. A more likely explanation for adaptation gaps is a failure to account for the adaptation option value that arises due to the possibility of maladaptation.

Suggested Citation

  • Charles Sims & Sarah E. Null & Josue Medellin-Azuara & Augustina Odame, 2021. "Hurry Up Or Wait: Are Private Investments In Climate Change Adaptation Delayed?," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 12(04), pages 1-36, November.
  • Handle: RePEc:wsi:ccexxx:v:12:y:2021:i:04:n:s2010007821500123
    DOI: 10.1142/S2010007821500123
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    1. Hashida, Yukiko & Lewis, David J., 2022. "Estimating welfare impacts of climate change using a discrete-choice model of land management: An application to western U.S. forestry," Resource and Energy Economics, Elsevier, vol. 68(C).
    2. Anna Josephson & Rodrigo Guerra Su & Greg Collins & Katharine Jacobs, 2024. "The Economics of Climate Adaptation: An Assessment," Papers 2411.16893, arXiv.org.
    3. Johnson, Kelsey K. & Lewis, David J., 2024. "Weather variability risks slow climate adaptation: An empirical analysis of forestry," Journal of Environmental Economics and Management, Elsevier, vol. 125(C).

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