Analysis of Technological Portfolios for CO2 stabilizations and Effects of Technological Changes

In this study, cost-effective technological options to stabilize CO2 concentrations at 550, 500, and 450 ppmv are evaluated using a world energy systems model of linear programming with a high regional resolution. This model treats technological change endogenously for wind power, photovoltaics, and fuel-cell vehicles, which are technologies of mass production and are considered to follow the “learning by doing” process. Technological changes induced by climate policies are evaluated by maintaining the technological changes at the levels of the base case wherein there is no climate policy. The results achieved through model analyses include 1) cost-effective technological portfolios, including carbon capture and storage, marginal CO2 reduction costs, and increases in energy system cost for three levels of stabilization and 2) the effect of the induced technological change on the above mentioned factors. A sensitivity analysis is conducted with respect to the learning rate.Energy systems model, Global warming, Technological portfolios, Technological changes

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

Climate Change and Sea Level Rise Projections for Boston

While the broad outlines of how climate change would impact Boston have been known for some time, it is only recently that we have developed a more definitive understanding of what lies ahead. That understanding was advanced considerably with the publication of Climate Change and Sea Level Rise Projections for Boston by the Boston Research Advisory Group (BRAG).The BRAG report is the first major product of "Climate Ready Boston," a project led by the City of Boston in partnership with the Green Ribbon Commission and funded in part by the Barr Foundation. The BRAG team includes 20 leading experts from the region's major universities on subjects ranging from sea level rise to temperature extremes. University of Massachusetts Boston professors Ellen Douglas and Paul Kirshen headed the research.The BRAG report validates earlier studies, concluding Boston will get hotter, wetter, and saltier in the decades ahead (see figures below). But the group has produced a much more definitive set of projections than existed previously, especially for the problem of sea level rise. BRAG also concluded that some of the effects of climate change will come sooner than expected, accelerating the urgency of planning and action

Market-based Options for Security of Energy Supply

Energy market liberalization and international economic interdependence have affected governments’ ability to react to security of supply challenges. On the other side, whereas in the past security of supply was largely seen as a national responsibility, the frame of reference has increasingly become the EU in which liberation increases security of supply mainly by increasing the number of markets participants and improving the flexibility of energy systems. In this logic, security of supply becomes a risk management strategy with a strong inclination towards cost effectiveness, involving both the supply and the demand side. Security of supply has two major components that interrelate: cost and risk. This paper focus the attention on costs in the attempt to develop a market compatible approach geared towards security of supply.Energy supply, Market-based options

Global Sensitivity Analysis for Offshore Wind Cost Modelling

Abstract The costs of offshore wind are decreasing rapidly. However, there is a need to better understand the key drivers behind these cost reductions. New environmental regulations, economic policies, technological advancements and financing structures have resulted in a set of relationships that need to be considered in order to define risks and profitability for the next generation of offshore wind farms. We use an industry‐leading offshore wind cost modelling tool which integrates site characteristics, technology specificities and financial modelling expertise and apply state‐of‐art global sensitivity analysis methods for different classes of offshore wind farms, ranking the contribution of around 150 input parameters that influence the cost of offshore wind development. We show that the top 5 parameters when building an offshore wind investment business case are the wind speed, target equity rate of return, turbine costs, drilling costs and debt service coverage ratio. The contribution of this paper can help guide additional efforts towards reducing the uncertainty of those key parameters to decrease costs and provide a framework to choose global sensitivity analysis techniques for offshore wind techno‐economic models

What do economists tell us about venture capital contracts?

Venture capital markets are characterized by multiple incentive problems and asymmetric information in an uncertain environment. All kinds of agency problems are present: moral hazard, adverse selection, hold-up problems, window dressing, etc. Entrepreneurs and venture capitalists enter into contracts that influence their behavior and mitigate the agency costs. In particular, they select an appropriate kind and structure of financing and specify the rights as well as the duties of both parties. The typical features of venture capital investments are: an intensive screening and evaluation process, an active involvement of venture capitalists in their portfolio companies, a staging of capital infusions, the use of special financing instruments such as convertible debt or convertible preferred stock, syndication among venture capitalists, or a short investment horizon. --Venture Capital,Agency Costs

Annotated bibliography on the economic effects of global climate change on fisheries

Fisheries, Bibliography, Climatic changes