Emissions Trading And Business

by Antes, Rolf; Hansjürgens, Bernd; Letmathe, Peter

• ISBN13: 9783790817478
• ISBN10: 3790817473
• Format: Hardcover
• Copyright: 2006-10-15
• Publisher: Physica Verlag

Summary

Emissions trading challenges the management of companies in an entirely new manner. It does not only allow for a bigger flexibility in management decisions concerning emission issues like other marked based environmental policy instruments. Furthermore it changes the code by which environmental policy steers management decisions from hierarchical to monetary information. But is this change transmitted and mirrored in management decisions, processes and structures? And, how do they change? When flexibility is given to the companies they have several opportunities to react. Moreover different institutional architectures of emissions trading schemes are possible and have been implemented, like in the US, the UK or the EU. The 24 contributions discuss theoretically and empirically in four parts the following subjects: 1. Institutional design, decision making and innovation, 2. Investment and management strategies, 3. ET and business administration, 4. Effects of ET schemes existing and being implemented.

Table of Contents

Foreword	p. V
Preface and acknowledgements	p. VII
Introduction	p. 1
Institutional design, decision making and innovation
Abatement costs vs. compliance costs in multi-period emissions trading - the firms' perspective	p. 11
Introduction	p. 12
Emissions trading and allocation of allowances	p. 13
The model	p. 16
Numerical analysis	p. 20
Conclusion	p. 23
Generous allocation and a ban on banking - implications of a simulation game for EU emissions trading	p. 27
Introduction	p. 28
Banking in the EU ETS	p. 29
The emissions trading simulation Set Up	p. 30
Results of Set Up	p. 33
Conclusions	p. 36
Emissions trading and innovation in the German electricity industry-impact of possible design options for an emissions trading scheme on innovation strategies in the German electricity industry	p. 39
Introduction	p. 40
Innovation and windows of opportunity	p. 40
Time windows in the German electricity market	p. 41
Innovation incentives of different allocation methods	p. 45
Conclusions	p. 49
A dynamic game of technology diffusion under emissions trading: an experiment	p. 53
Introduction	p. 54
The model	p. 55
The game	p. 58
The experiment	p. 65
Concluding remarks	p. 69
Sustainability entrepreneurship in the context of emissions trading	p. 73
Introduction	p. 74
Conceptual framework	p. 74
Sustainability intra- and interpreneurship in the context of emissions trading	p. 80
Conclusions	p. 84
Investment and management strategies under emissions trading
Optimal strategies for emissions trading in a Putty-Clay Vintage Model	p. 91
Introduction	p. 92
Emissions trading from the firm's perspective	p. 92
Short-term production planning	p. 94
Long-term production planning with the Vintage Production Functions and the Putty-Clay Model	p. 97
Integrated investment and production planning	p. 100
Conclusions	p. 102
Strategic production management of companies participating in the European greenhouse gas emission allowance trading scheme	p. 105
Introduction	p. 106
Characterisation of the new production factor emission allowances	p. 106
A model for investment and production planning within electric utilities considering the framework of the European CO[subscript 2] emission allowance trading	p. 107
Long term planning of energy supply concepts in energy-intensive production companies	p. 112
A model to analyse the efficiency of international cooperation in mitigating climate change	p. 115
Summary	p. 116
Decision making in the emissions-market under uncertainty	p. 119
Background	p. 120
Modelling the decision process	p. 120
Modelling the stochastic variables	p. 122
Optimization model	p. 124
Exemplary results	p. 127
Summary and outlook	p. 131
The impact of climate policy on heat and power capacity investment decisions	p. 133
Introduction	p. 134
Investment decision process	p. 135
Quantitative investment appraisal	p. 138
Discussion and conclusions	p. 145
Implications of the European emissions trading scheme for strategic energy management in small and medium enterprises	p. 151
Introduction	p. 152
Relevance of the European emissions trading scheme for small and medium enterprises	p. 152
Implications of the community scheme for small and medium enterprises	p. 154
Scenario analysis involving dependence on the emissions allowance price	p. 159
Conclusion	p. 163
Management and optimization of environmental data within emissions trading markets-VEREGISTER and TEMPI	p. 165
Introduction	p. 166
Management of greenhouse gas emissions	p. 166
Forecasting and econo-mathematics	p. 169
Emissions trading market	p. 173
Conclusion	p. 176
Emissions trading with changing future commitments - some initial thoughts	p. 177
Introduction	p. 178
Application of the discounted cash flow approach	p. 179
Emissions trading and real options	p. 181
Conclusions	p. 185
Emissions trading and business administration
Emission Trading North - important findings from a business perspective	p. 189
Introduction	p. 190
The pilot project	p. 190
Results	p. 192
Final remarks	p. 196
Corporate greenhouse gas management in the context of emissions trading regimes	p. 199
Introduction	p. 200
How GHGs affect companies	p. 200
Emerging organizational fields of GHG management	p. 205
Internal effects of GHG emissions trading regimes on companies	p. 208
Accounting for emission rights	p. 219
Introduction	p. 220
Evolution of the climate policy up until the introduction of the scheme for greenhouse gas emission allowance trading	p. 221
Greenhouse gas emission reporting	p. 223
Treatment of emission rights in the annual accounts	p. 229
Evolution of accounting at the international level	p. 235
Possible development of the recognition of environmental issues in annual accounts	p. 237
Summary	p. 239
The role of stakeholder driven corporate governance - the example of BP's climate change strategy	p. 241
Introduction	p. 242
Background: evaluation research and policy network analysis	p. 243
Evaluation and assessment of the GHG commitment	p. 244
The policy network approach applied to the BP plc. policy making process	p. 248
Conclusions from the case study	p. 252
Emissions trading and effects on financial markets	p. 257
Introduction	p. 258
Interactions of financial markets and sustainability	p. 258
Emissions trading and effects at a company level	p. 259
New business opportunities in financial markets	p. 262
Current developments and a framework for pro-active involvement	p. 266
Conclusions	p. 270
Effects of emissions trading schemes existing and being implemented
The EU emissions trading scheme and its competitiveness effects upon European business - results from the CGE model DART	p. 275
Introduction	p. 276
Emissions trading and competitiveness in a globalizing world	p. 277
Simulation of competitiveness effects of the EU emissions trading scheme	p. 278
Simulation results	p. 282
Summary and conclusions	p. 287
Implementing the EU emissions trading directive in Spain: a comparative study of corporate concerns and strategies in different industrial sectors	p. 293
Introduction: aim, scope and methodology	p. 294
The theoretical approach: public choice and climate policy	p. 295
Firms, emissions trading and allocation: the views and strategies of the sectors covered by the EU ETS	p. 296
Concluding remarks	p. 311
UK's climate change levy and emissions trading scheme: implications for businesses' productivity and economic efficiency	p. 313
Introduction	p. 313
Overview of UK's climate change levy (CCL) and emissions trading scheme (ETS)	p. 314
The stochastic translog frontier cost function model	p. 316
Dynamics of the model	p. 319
The experience so far	p. 320
Conclusion	p. 323
The sources of emission reductions: evidence from U.S. SO[subscript 2] emissions from 1985 through 2002	p. 327
Introduction	p. 328
Data and methodology	p. 330
Decomposition results	p. 334
Conclusion	p. 340
Policy-business interaction in emissions trading between multiple regions	p. 353
Emissions trading on multiple levels	p. 354
Links between economic growth, emission reductions and mitigation costs	p. 357
Choice between technical options	p. 360
Non-linear ratios	p. 361
Model-based data and computations for the world's regions and selected cases	p. 364
The changing role of the project mechanisms in emissions trading	p. 369
Introduction	p. 370
Development of the project mechanisms	p. 370
What can be done to reduce costs in the CDM and where is progress being made?	p. 377
Conclusions	p. 383
Prevailing technologies and locations of CDM projects: the current situation compared with expectations	p. 387
Introduction	p. 388
Overview of CDM projects at present	p. 388
Determinants of the IRR of a landfill project	p. 395
Conclusions	p. 399
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