Discounting, catastrophic risks management and vulnerability modeling

Ermoliev, Y., Ermolieva, T., Fischer, G., Makowski, M. ORCID: https://orcid.org/0000-0002-6107-0972, Nilsson, S., & Obersteiner, M. ORCID: https://orcid.org/0000-0001-6981-2769 (2008). Discounting, catastrophic risks management and vulnerability modeling. Mathematics and Computers in Simulation 79 (4) 917-924. 10.1016/j.matcom.2008.02.004.

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Abstract

Traditional discounting dramatically affects the outcome of catastrophic risk management and spatio-temporal vulnerability modeling. The misperception of discount rates produces inadequate evaluations of risk management strategies, which may provoke catastrophes and significantly contribute to the increasing vulnerability of our society. This paper analyses the implication of potential catastrophic events on the choice of discounting. In particular, it shows the necessity of using proposed equivalent undiscounted stopping time criterion and Monte Carlo based stochastic optimization procedures.

Item Type:	Article
Uncontrolled Keywords:	Catastrophic risks; stopping time; vulnerability modeling; discounting; adaptive Monte Carlo, stochastic optimization
Research Programs:	Forestry (FOR) Integrated Modeling Environment (IME) Modeling Land-Use and Land-Cover Changes (LUC)
Bibliographic Reference:	Mathematics and Computers in Simulation; 79(4):917-924 (15 December 2008)
Depositing User:	IIASA Import
Date Deposited:	15 Jan 2016 08:41
Last Modified:	27 Aug 2021 17:20
URI:	https://pure.iiasa.ac.at/8620

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