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Inducing Low-Carbon Investment in the Electric Power Industry through a Price Floor for Emissions Trading AgEcon
Brauneis, Alexander; Loretz, Michael; Roland, Mestel; Palan, Stefan.
Uncertainty about long-term climate policy is a major driving force in the evolution of the carbon market price. Since this price enters the investment decision process of regulated firms, this uncertainty increases the cost of capital for investors and might deter invest-ments into new technologies at the company level. We apply a real options-based approach to assess the impact of climate change policy in the form of a constant or growing price floor on investment decisions of a single firm in a competitive environment. This firm has the opportunity to switch from a high-carbon “dirty” technology to a low-carbon “clean” technology. Using Monte Carlo simulation and dynamic programming techniques for real market data, we determine the optimal CO2 price...
Tipo: Working Paper Palavras-chave: Carbon price; Price floor; Technological change; Investment decision; Real option approach; Resource /Energy Economics and Policy; D81; O38; Q55.
Ano: 2011 URL: http://purl.umn.edu/119096
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The introduction of a carbon price and the use of agrichar in the sugarcane industry AgEcon
Thomas, Cameron.
The Australian Government‘s proposal to put a price on carbon is likely to have a significant impact on the price of farm inputs (diesel, fertiliser, water and electricity). Furthermore, offsets (reduction or removal of greenhouse gas emissions that counterbalances emissions elsewhere in the economy) are a potential area of expansion of interest to the agricultural sector. Agrichar is one of the new technologies and farming practices being investigated to counteract carbon-price-imposed costs. Its two claimed benefits, which relate both to the profitability of sugarcane growers as well as to climate change, are the reduction in fertiliser application and the carbon which agrichar can store in the soil for hundreds to thousands of years. This study drew on...
Tipo: Article Palavras-chave: Carbon price; Sugarcane profitability; Carbon offsets; Agricultural adaptation; Farm Management.
Ano: 2010 URL: http://purl.umn.edu/120871
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