As growing attention is paid to climate change adaptation as an actual policy issue, the significant meaning of climate variability in adaptation decisions is beginning to be recognized. By using a real option framework, we shed light on how climate change and climate variability affect...

This paper provides an economic analysis of timber species change as a tool for adapting forests to climate change. We use the framework of cost-benefit analysis, taking uncertainty into account both exogenously, via sensitivity analysis, and endogenously, via (quasi-)option value calculations....