Carbon Dioxide Removal and Tradeable Put Options at Scale

Options are derivative contracts that give the purchaser the right to buy (call options) or sell (put options) a given underlying asset at a particular price at a future date. The purchaser of a put option may exercise the right to sell the asset to the issuer at any point in the future before the expiration of the contract. These rights may be contracted directly between two parties (i.e. over-the-counter), or may sold publicly on formal exchanges, such as the Chicago Board Options Exchange (CBOE). If the latter, they are called Tradeable Put Options (TPOs) because they can be bought and sold by third-parties via a secondary market. The World Bank has a Pilot Auction Facility for methane and carbon mediation which uses TPOs in carbon-relevant markets, giving producers (of e.g. forest restoration) a floor price for their product. This enables long-term producer planning. 
 
 We discuss the potentially broader use of these options contracts in Carbon Dioxide Removal (CDR) markets generally and at scale. We conclude that they can, if priced correctly, encourage rapid investment both in CDR technology and in operational capacity. TPOs could do this without creating same type of systemic risk associated with other instruments (e.g. long-dated futures). Nevertheless, the widespread use of such instruments potentially creates novel risks. These include the political risk of premature closure (conventionally rendered as 'counting your chickens before they are hatched'); and the economic risk of overpaying for carbon removal services. These instruments require careful structuring, and do not inoculate the CDR market against regulatory disruption, or political pressure. Accordingly, we note the potential for the development of TPO markets in CDR, but we urge caution in respect of identified risks

Carbon Dioxide Removal and the futures market

Futures contracts are exchange-traded financial instruments that enable parties to fix a price in advance, for later performance on a contract. Forward contracts also entail future settlement, but they are traded directly between two parties. Futures and forwards are used in commodities trading, as producers seek financial security when planning production. We discuss the potential use of futures contracts in Carbon Dioxide Removal (CDR) markets; concluding that they have one principal advantage (near-term price security to current polluters), and one principal disadvantage (a combination of high price volatility and high trade volume means contracts issued by the private sector may cause systemic economic risk). Accordingly, we note the potential for the development of futures markets in CDR, but urge caution about the prospects for market failure. In particular, we consider the use of regulated markets: to ensure contracts are more reliable, and that moral hazard is minimised. While regulation offers increased assurances, we identify major insufficiencies with this approach—finding it generally inadequate. In conclusion, we suggest that only governments can realistically support long-term CDR futures markets. We note existing long-term CDR plans by governments, and suggest the use of state-backed futures for supporting these assurances

Assessing the policy impacts on non-ferrous metals industry's CO2 reduction: Evidence from China

The nonferrous metals industry (NMI) consumes a great amount of energy, and is a typical high CO2 emission sector. The NMI is one of the eight most concerning industries in the Intergovernmental Panel on Climate Change (IPCC) Fifth Assessment Report. In this study, we summarized policies that impact Chinese NMI's development and grouped them into three types: energy structure policies, energy efficiency improving policies and production-scale policies. Based on those quantitative policy goals, a bottom-up model has been developed to study the CO2 emissions of five NMI's major sub-sectors from 2010 to 2030. The results showed that if China's central government could stick to the CO2 reduction policy strength of 13th Five-Year Plan (2016–2020), then the copper, lead and zinc industries can reach their emissions peak before 2030. Furthermore, if the Chinese government restricts the production of primary aluminum of 46.2 million tons in 2025, then the CO2 emissions of China's non-ferrous industry could reach the peak in that year, when the CO2 emissions peak is 297 million tons. Having benefited from the effective CO2 reduction policies of NMI, China may reach its ambitious CO2 peaking goals more easily

Assessment of equity principles for international climate policy based on an integrated assessment model

Defining an internationally equitable distribution of the burdens of reducing greenhouse gases has been one of core concerns for as long as climate policies have been debated. This paper suggests the specific formulae and indicators for four equity principles for international climate policy including the ability to pay, egalitarianism, grandfathering, and historical responsibility. We introduce the carbon trading scheme into the integrated assessment model to assess and compare the global climate policies which are based on the four principles. To be specific, the regional emission caps are determined by the four equity principles, and all regions are allowed to buy and sell permits. Results show that none of the four equity principles creates a burden sharing arrangement that completely equalizes the benefits of each nation. To be specific, grandfathering is more beneficial to developed countries, while historical responsibility benefits developing countries more. From the global perspective, the global cumulative output of the grandfathering is 8% higher than that of the historical responsibility. In addition, international cooperation on climate change mitigation is necessary, because if individual nations undertake policies which are in their national self-interests, global cumulative CO2 emission will be over two times as much as that in cooperative scenarios

Complexity and Inapproximability Results for Parallel Task Scheduling and Strip Packing

We study the Parallel Task Scheduling problem $Pm|size_j|C_{\max}$ with a constant number of machines. This problem is known to be strongly NP-complete for each $m \geq 5$, while it is solvable in pseudo-polynomial time for each $m \leq 3$. We give a positive answer to the long-standing open question whether this problem is strongly $NP$-complete for $m=4$. As a second result, we improve the lower bound of $\frac{12}{11}$ for approximating pseudo-polynomial Strip Packing to $\frac{5}{4}$. Since the best known approximation algorithm for this problem has a ratio of $\frac{4}{3} + \varepsilon$, this result narrows the gap between approximation ratio and inapproximability result by a significant step. Both results are proven by a reduction from the strongly $NP$-complete problem 3-Partition

Flexible Manufacturing Systems: background examples and models

In this paper, we discuss recent innovations in manufacturing technology and their implications on the design and control of manufacturing systems. Recognizing the need to respond properly to rapidly changing market demands, we discuss several types of flexibility that can be incorporated in our production organisation to achieve this goal. We show how the concept of a Flexible Manufacturing System (FMS) naturally arises as an attempt to combine the advantages of traditional Job Shops and dedicated production lines.The main body of the paper is devoted to a classification of FMS problem areas and a review of models developed to understand and solve these problems. For each problem area, a number of important contributions in the literature is indicated. The reader, interested in the applications of Operations Research models but not familiar with the technical background of FMS’s, will find the descriptions of some essential FMS elements useful. Some final remarks and directions for future research conclude the paper.<br/

CCL5 regulation of mucosal chlamydial immunity and infection

<p>Abstract</p> <p>Background</p> <p>Following genital chlamydial infection, an early T helper type 1 (Th1)-associated immune response precedes the activation and recruitment of specific Th1 cells bearing distinct chemokine receptors, subsequently leading to the clearance of <it>Chlamydia</it>. We have shown that CCR5, a receptor for CCL5, is crucial for protective chlamydial immunity. Our laboratory and others have also demonstrated that CCL5 deficiencies found in man and animals can increase the susceptibility and progression of infectious diseases by modulating mucosal immunity. These findings suggest the CCR5-CCL5 axis is necessary for optimal chlamydial immunity. We hypothesized CCL5 is required for protective humoral and cellular immunity against <it>Chlamydia</it>.</p> <p>Results</p> <p>The present study revealed that CCR5 and CCL5 mRNAs are elevated in the spleen, iliac lymph nodes (ILNs), and genital mucosa following <it>Chlamydia muriduram </it>challenge. Antibody (Ab)-mediated inhibition of CCL5 during genital chlamydial infection suppressed humoral and Th1 > Th2 cellular responses by splenic-, ILN-, and genital mucosa-derived lymphocytes. Antigen (Ag)-specific proliferative responses of CD4⁺T cells from spleen, ILNs, and genital organs also declined after CCL5 inhibition.</p> <p>Conclusion</p> <p>The suppression of these responses correlated with delayed clearance of <it>C. muriduram</it>, which indicate chlamydial immunity is mediated by Th1 immune responses driven in part by CCL5. Taken together with other studies, the data show that CCL5 mediates the temporal recruitment and activation of leukocytes to mitigate chlamydial infection through enhancing adaptive mucosal humoral and cellular immunity.</p