气候变化领域集成服务门户(CCPortal): Business responses to climate policy uncertainty: Theoretical analysis of a twin deferral strategy and the risk-adjusted price of carbon

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DOI	10.1016/j.energy.2020.117996
	Business responses to climate policy uncertainty: Theoretical analysis of a twin deferral strategy and the risk-adjusted price of carbon
	Golub A.A.; Lubowski R.N.; Piris-Cabezas P.
发表日期	2020
ISSN	3605442
卷号	205
英文摘要	Climate policies are currently insufficient to meet stabilization goals and remain uncertain. This paper develops a conceptual model to illustrate investment decisions of a risk-neutral firm faced with uncertain climate policy requirements. The firm trades off lost profits from abating too much (being “long”) versus too little (being “short”). Despite risk neutrality, profits are nonlinear such that uncertainty encourages a twin deferral strategy of deferring investment in deploying abatement technology as well as in buying and holding (banking) emissions allowances. This strategy avoids risks of stranded abatement investments but suppresses carbon prices such that prices are projected to evolve through a sequence of stepwise jumps as policies mature. Prices may spike dramatically during an abatement “short squeeze” if firms must rapidly abate in tandem. To mitigate such risk, firms may engineer payoffs from abatement strategies if they have access to suitable hedging tools. These potentially include call options (the right but not obligation to purchase at a fixed price) on avoided emissions from tropical deforestation, as well as investments in R&D and price guarantees (put options) on abatement. Policy makers should support development of hedging tools while enhancing certainty over future policies. © 2020
英文关键词	Climate policy uncertainty; Deferral option; Foster-hart risk metrics; Real options; REDD+; Risk-adjusted carbon price
scopus关键词	Carbon; Costs; Deforestation; Investments; Profitability; Risk assessment; Uncertainty analysis; Abatement investment; Abatement technologies; Avoided emissions; Conceptual model; Investment decisions; Risk-neutral firm; Tropical deforestation; Uncertain climate; Climate models; abatement cost; business development; decision making; environmental economics; environmental policy; industrial enterprise; investment incentive; pollution tax; research and development; theoretical study; uncertainty analysis
来源期刊	Energy
文献类型	期刊论文
条目标识符	http://gcip.llas.ac.cn/handle/2XKMVOVA/176614
作者单位	American University Washington, Washington, DC, United States; Environmental Defense Fund, New York (US), Boston (US), Madrid, Spain
推荐引用方式 GB/T 7714	Golub A.A.,Lubowski R.N.,Piris-Cabezas P.. Business responses to climate policy uncertainty: Theoretical analysis of a twin deferral strategy and the risk-adjusted price of carbon[J],2020,205.
APA	Golub A.A.,Lubowski R.N.,&Piris-Cabezas P..(2020).Business responses to climate policy uncertainty: Theoretical analysis of a twin deferral strategy and the risk-adjusted price of carbon.Energy,205.
MLA	Golub A.A.,et al."Business responses to climate policy uncertainty: Theoretical analysis of a twin deferral strategy and the risk-adjusted price of carbon".Energy 205(2020).