An Optimised Investment Model of the Economics of Integrated Returns from CCS Deployment in the UK/UKCS

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Environmental Finance:An Interdisciplinary Review

Environmental finance has gained considerable attention globally as an emerging interdisciplinary research area. This study uses bibliometric analysis to systematically review major studies on environmental finance-related areas published since the 1970s. Through a bibliometric analysis of 892 environmental finance-related articles sourced from the Web of Science database, we identified the main research streams and illustrated the trending research themes of environmental finance. We find that publications related to environmental finance have increased exponentially over the past decade. Current research streams include corporate and social re- sponsibility (CSR), climate negotiations, natural gas price volatility, national policy, and cost comparisons. Further analysis of the recent five years of literature shows that emerging research topics include climate finance, sustainable finance, firm value, climate risk, and green bonds. Finally, we conclude with a future research agenda for environmental finance

An Evaluation of Overseas Oil Investment Projects under Uncertainty Using a Real Options Based Simulation Model

This paper applies real options theory to establish an overseas oil investment evaluation model that is based on Monte Carlo simulation and is solved by the Least Squares Monte-Carlo method. To better reflect the reality of overseas oil investment, our model has incorporated not only the uncertainties of oil price and investment cost but also the uncertainties of exchange rate and investment environment. These unique features have enabled our model to be best equipped to evaluate the value of oil overseas investment projects of three oil field sizes (large, medium, small) and under different resource tax systems (royalty tax and production sharing contracts). In our empirical setting, we have selected China as an investor country and Indonesia as an investee country as a case study. Our results show that the investment risks and project values of small sized oil fields are more sensitive to changes in the uncertainty factors than the large and medium sized oil fields. Furthermore, among the uncertainty factors considered in the model, the investment risk of overseas oil investment may be underestimated if no consideration is given of the impacts of exchange rate and investment environment. Finally, as there is an important trade-off between oil resource investee country and overseas oil investor, in medium and small sized oil investment negotiation the oil company should try to increase the cost oil limit in production sharing contract and avoid the term of a windfall profits tax to reduce the investment risk of overseas oil fields.Overseas Oil Investment, Project Value, Real Options, Least Squares Monte-Carlo

The Relationship between the EU ETS and Energy Commodities under Extreme Market Conditions

Climate change is becoming a more and more severe problem. Over many years, governments and organizations have introduced and proposed several measures to limit global warming. One of which is the Kyoto Protocol which was introduced by the UN as a measure to limit greenhouse gas emissions by introducing carbon trading. Carbon trading is a concept where those responsible for the emissions pay the price of their negative impact on climate. Fossil fuels, i.e., oil, gas, and coal are commodities that heavily influence the climate negatively. Therefore, this thesis aims to research the relationship between the returns of European Union Allowances and the returns of energy commodities under extreme market conditions. Employing quantile regression method, we study these relationships at different quantile levels. Through our research we found that there is a significant relationship between the variables, but that the relationship varies across different quantile levels. In addition, results differ when conducting the analyses with each commodity separately against carbon returns, then when all energy commodities are included. Overall, our thesis findings contribute to the existing literature regarding the relationship between carbon and energy markets under extreme market conditions

The Relationship between the EU ETS and Energy Commodities under Extreme Market Conditions

Climate change is becoming a more and more severe problem. Over many years, governments and organizations have introduced and proposed several measures to limit global warming. One of which is the Kyoto Protocol which was introduced by the UN as a measure to limit greenhouse gas emissions by introducing carbon trading. Carbon trading is a concept where those responsible for the emissions pay the price of their negative impact on climate. Fossil fuels, i.e., oil, gas, and coal are commodities that heavily influence the climate negatively. Therefore, this thesis aims to research the relationship between the returns of European Union Allowances and the returns of energy commodities under extreme market conditions. Employing quantile regression method, we study these relationships at different quantile levels. Through our research we found that there is a significant relationship between the variables, but that the relationship varies across different quantile levels. In addition, results differ when conducting the analyses with each commodity separately against carbon returns, then when all energy commodities are included. Overall, our thesis findings contribute to the existing literature regarding the relationship between carbon and energy markets under extreme market conditions