Buildings & construction

Given the ongoing societal debate over what might be the most favourable course of action in terms of adaption and risk management, cost-benefits, acceptability, viability and any other implications of adaptation policies should be evaluated within the context of other pressing longer-term structural issues, such as the ‘greening’ of tax and investment, population ageing and longer-term sustainable growth at the regional and global level.

In adopting measures to adapt to climate change, adaptation options need to be based on robust assessment approaches which allow for the allocation of scarce resources. An important part of this process involves determining the costs and benefits of adaptation options in order to reduce vulnerability, enhance adaptive capacity and build resilience.

Discounting is especially relevant in the context of climate change as it requires addressing long term and intertemporal decision-making. From an economic perspective, intertemporal choices have been assessed during the last 80 years using the discounted utility model, formulated by Samuelson (1937). The discounted utility model is based on the assumption that people make decisions by assessing its (positive or negative) consequences in a similar way to how the market evaluates gains and losses.

Uncertainty is a state of having limited knowledge where it is impossible to exactly describe existing state or future outcome (Hubbard, 2014). It applies to predictions of future events, to physical measurements already made, or to the unknown. The IPCC glossary of Working Group II defines uncertainty as a state of incomplete knowledge that can result from a lack of information or from disagreement about what is known or even knowable.