Stochastic Programming and Decision Theory in the Management of Natural Resources

The growing interest for environmental issues and for a rational approach to natural resources exploitation has generated a whole new subfield of Operational Research tightly connected to Environmental Economics. Such interaction not only entails the development of new techniques addressing natural resource management problems, but also leads to a different prospective in considering the two disciplines, thus generating outbreaks towards the understanding of both subjects. The Thesis aims to provide an organized and coherent unifying overview of approaches and models that have been developed in different research areas (operation research, mathematics, finance, environmental economics, etc.) in order to tackle the issue of decision making in natural resources management. Within this framework there are two main categories of problems, namely complete and gradual land/resource conversion problems. The former concerns the optimal timing for the complete exploitation or conversion of a territory/resource. The latter focuses on finding an optimal land/resources portfolio composition through time. The main objective of this Thesis is to develop two integrated models stemming from both operational research and dynamic optimization theory, to address complete and gradual conversion problems, placing the main focus on the interaction between time and uncertainty. This is extremely relevant since most decisions made in the field of natural resources and sustainable development are irreversible