Climatic Change

, Volume 116, Issue 2, pp 411–423

Climate change uncertainty: building flexibility into water and flood risk infrastructure

  • Berry Gersonius
  • Richard Ashley
  • Assela Pathirana
  • Chris Zevenbergen

DOI: 10.1007/s10584-012-0494-5

Cite this article as:
Gersonius, B., Ashley, R., Pathirana, A. et al. Climatic Change (2013) 116: 411. doi:10.1007/s10584-012-0494-5


Infrastructure for water, urban drainage and flood protection has a typical lifetime of 30–200 years and its continuing performance is very sensitive to climate change. Investment decisions for such systems are frequently based on state-of-the-art impact assessments using a specified climate change scenario in order to identify a singular optimal adaptive strategy. In a non-stationary world, however, it is risky and/or uneconomic to plan for just one climate change scenario as an average or best estimate, as is done with the use of the Predict-Then-Adapt method. We argue that responsible adaptation requires an alternative method that effectively allows for the lack of knowledge about future climate change by adopting a managed/adaptive strategy. The managed/adaptive strategy confers the ability, derived from built-in flexibility, to adjust to future uncertainties as they unfold. This will restrict the effect of erroneous decisions and help avoid maladaptation. Real In Options (RIO) analysis can facilitate the development of an optimal managed/adaptive strategy to climate change. Here, we show the economic benefits of adopting a managed/adaptive strategy and building in flexibility, using RIO analysis applied for the first time to urban drainage infrastructure.



Geometric brownian motion


Probability density function


Real in options


Real options

Supplementary material

10584_2012_494_MOESM1_ESM.doc (156 kb)
ESM 1(DOC 155 kb)

Copyright information

© Springer Science+Business Media B.V. 2012

Authors and Affiliations

  • Berry Gersonius
    • 1
  • Richard Ashley
    • 1
    • 2
  • Assela Pathirana
    • 1
  • Chris Zevenbergen
    • 1
  1. 1.UNESCO-IHE Institute for Water EducationDelftThe Netherlands
  2. 2.Pennine Water Group, Department of Civil and Structural EngineeringUniversity of SheffieldSheffieldUK

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