Flexible Options for Greenhouse Gas-Emitting Energy Producer

The reduction of emissions from deforestation and forest degradation (REDD) constitutes part of the international climate agreements and contributes to the Sustainable Development Goals. This research is motivated by the risks associated with the future CO2 price uncertainty in the context of the offsetting of carbon emissions by regulated entities. The research asked whether it is possible to reduce these financial risks. In this study, we consider the bilateral interaction of a REDD supplier and a greenhouse gas (GHG)-emitting energy producer in an incomplete emission offsets market. Within this setting, we explore an innovative financial instrument—flobsion—a flexible option with benefit-sharing. For the quantitative assessment, we used a research method based on a two-stage stochastic technological portfolio optimization model established in earlier studies. First, we obtain an important result that the availability of REDD offsets does not increase the optimal emissions of the electricity producer under any future CO2 price realization. Moreover, addressing concerns about a possible “crowding–out” effect of REDD-based offsets, we demonstrate that the emissions and offsetting cost will decrease and increase, respectively. Second, we demonstrate the flexibility of the proposed instrument by analyzing flobsion contracts with respect to the benefit-sharing ratio and strike price within the risk-adjusted supply and demand framework. Finally, we perform a sensitivity analysis with respect to CO2 price distributions and the opportunity costs of the forest owner supplying REDD offsets. Our results show that flobsion’s flexibility has advantages compared to a standard option, which can help GHG-emitting energy producers with managing their compliance risks, while at the same time facilitating the development of REDD programs. In this study we limited our analysis to the case of the same CO2 price distributions foreseen by both parties; the flobsion pricing under asymmetric information could be considered in the future

Flobsion—Flexible Option with Benefit Sharing

Global environmental goals and the Paris agreement declared the need to avoid dangerous climate change by reducing emissions of greenhouse gases with an ultimate goal to transform today’s policies and reach climate neutrality before the end of the century. In the medium to long-term, climate policies imply rising CO 2 price and consequent financial risk for carbon-intensive producers. In this context, there is a need for tools to buffer CO 2 prices within the period of transition to greener technologies when the emission offsetting markets expose high volatility. Contracts for optional future purchase of carbon credits could provide emitters with a cost-efficient solution to address existing regulatory risks. At the same time, this would help to create much needed financing for the projects generating carbon credits in the future. This work presents the concept of a flobsion—a flexible option with benefit sharing—and demonstrates its advantages in terms of risk reduction for both seller and buyer as compared to both a “do nothing” strategy (offsetting at future market price) and a traditional option with a fixed strike price. The results are supported analytically and numerically, employing as a benchmark the dataset on historical CO 2 prices from the European Emission Trading Scheme. Flobsion has the potential to extend the traditional option in financial applications beyond compliance markets

The Conservation Reserve Program: Economic Implications for Rural America

This report estimates the impact that high levels of enrollment in the Conservation Reserve Program (CRP) have had on economic trends in rural counties since the program's inception in 1985 until today. The results of a growth model and quasi-experimental control group analysis indicate no discernible impact by the CRP on aggregate county population trends. Aggregate employment growth may have slowed in some high-CRP counties, but only temporarily. High levels of CRP enrollment appear to have affected farm-related businesses over the long run, but growth in the number of other nonfarm businesses moderated CRP's impact on total employment. If CRP contracts had ended in 2001, simulation models suggest that roughly 51 percent of CRP land would have returned to crop production, and that spending on outdoor recreation would decrease by as much as $300 million per year in rural areas. The resulting impacts on employment and income vary widely among regions having similar CRP enrollments, depending upon local economic conditions.Community/Rural/Urban Development, Land Economics/Use,

Forest protection and permanence of reduced emissions

Tropical forests are essential for climate change mitigation. With growing interest over the use of credits from reducing emissions from deforestation and forest degradation (REDD+) and other natural climate solutions within both voluntary and compliance carbon markets, key concerns about the long-term durability of the reductions, or their permanence, arise for countries, corporations, regulators, and policy makers. This paper seeks to analyze the longevity of emissions reductions from different policies to slow down and stop deforestation. To establish conditions of permanence, we conduct numerical analyses using a model based on a cellular automata algorithm that learns from historical deforestation patterns and other spatial features in the Brazilian state of Mato Grosso. First, we simulate increased law enforcement to curb deforestation at a jurisdictional scale from 2025 to 2034, followed by potential policy rollbacks from 2035 to 2050. Second, we consider alternative scenarios to avoid potentially legal deforestation coupled with reforestation. We find spatial and path dependence – a successful policy intervention may permanently change the deforestation trajectory even after potential policy reversals. Hence, permanence depends both on the probability of policy reversals and the risk of emissions overshooting. Our results are important for advancing the understanding around the unsettled debate on the permanence of avoided emissions. Further, this paper argues that as policies to prevent deforestation or reduce emissions otherwise are reversible, permanence should be understood and discussed in a probabilistic and time-dependent framework

Global variation in the cost of increasing ecosystem carbon

Slowing the reduction, or increasing the accumulation, of organic carbon stored in biomass and soils has been suggested as a potentially rapid and cost-effective method to reduce the rate of atmospheric carbon increase(1). The costs of mitigating climate change by increasing ecosystem carbon relative to the baseline or business-as-usual scenario has been quantified in numerous studies, but results have been contradictory, as both methodological issues and substance differences cause variability(2). Here we show, based on 77 standardized face-to-face interviews of local experts with the best possible knowledge of local land-use economics and sociopolitical context in ten landscapes around the globe, that the estimated cost of increasing ecosystem carbon varied vastly and was perceived to be 16-27 times cheaper in two Indonesian landscapes dominated by peatlands compared with the average of the eight other landscapes. Hence, if reducing emissions from deforestation and forest degradation (REDD+) and other land-use mitigation efforts are to be distributed evenly across forested countries, for example, for the sake of international equity, their overall effectiveness would be dramatically lower than for a cost-minimizing distribution.Peer reviewe

Perineal descent and patients’ symptoms of anorectal dysfunction, pelvic organ prolapse, and urinary incontinence

Contains fulltext : 89793.pdf (publisher's version ) (Closed access)INTRODUCTION AND HYPOTHESIS: The aim of this dynamic magnetic resonance (MR) imaging study was to assess the relation between the position and mobility of the perineum and patients' symptoms of pelvic floor dysfunction. METHODS: Patients' symptoms were measured with the use of validated questionnaires. Univariate logistic regression analyses were used to study the relationship between the questionnaires domain scores and the perineal position on dynamic MR imaging, as well as baseline characteristics (age, body mass index, and parity). RESULTS: Sixty-nine women were included in the analysis. Only the domain score genital prolapse was associated with the perineal position on dynamic MR imaging. This association was strongest at rest. CONCLUSIONS: Pelvic organ prolapse symptoms were associated with the degree of descent of the perineum on dynamic MR imaging. Perineal descent was not related to anorectal and/or urinary incontinence symptoms.1 juni 201

The Opportunity Cost of the Conservation Reserve Program: A Kansas Land Example

The effects of the Conservation Reserve Program (CRP) on farmland values is investigated using a set of parcel-level data for land sales in Kansas over the period 1998 to 2014. The sales data are used to estimate a hedonic model of land values that allows for the opportunity cost of CRP enrollment to vary across space and time. Factors impacting the opportunity costs include the relative productivity of land, returns to farming, and the time remaining under the CRP contracts. We find that the discount associated with having land under CRP contract averages 7%

Escaping the climate policy uncertainty trap: options contracts for REDD+

Climate policy uncertainty significantly hinders investments in low-carbon technologies, and the global community is behind schedule to curb carbon emissions. Strong actions will be necessary to limit the increase in global temperatures, and continued delays create risks of escalating climate change damages and future policy costs. These risks are system-wide, long-term and large-scale and thus hard to diversify across firms. Because of its unique scale, cost structure and near-term availability, Reducing Emissions from Deforestation and forest Degradation in developing countries (REDD+) has significant potential to help manage climate policy risks and facilitate the transition to lower greenhouse gas emissions. ‘Call’ options contracts in the form of the right but not the obligation to buy high-quality emissions reduction credits from jurisdictional REDD+ programmes at a predetermined price per ton of CO2 could help unlock this potential despite the current lack of carbon markets that accept REDD+ for compliance. This approach could provide a globally important cost-containment mechanism and insurance for firms against higher future carbon prices, while channelling finance to avoid deforestation until policy uncertainties decline and carbon markets scale up

Effects of Terrestrial Buffer Zones on Amphibians on Golf Courses

A major cause of amphibian declines worldwide is habitat destruction or alteration. Public green spaces, such as golf courses and parks, could serve as safe havens to curb the effects of habitat loss if managed in ways to bolster local amphibian communities. We reared larval Blanchard's cricket frogs (Acris blanchardi) and green frogs (Rana clamitans) in golf course ponds with and without 1 m terrestrial buffer zones, and released marked cricket frog metamorphs at the golf course ponds they were reared in. Larval survival of both species was affected by the presence of a buffer zone, with increased survival for cricket frogs and decreased survival for green frogs when reared in ponds with buffer zones. No marked cricket frog juveniles were recovered at any golf course pond in the following year, suggesting that most animals died or migrated. In a separate study, we released cricket frogs in a terrestrial pen and allowed them to choose between mown and unmown grass. Cricket frogs had a greater probability of using unmown versus mown grass. Our results suggest that incorporating buffer zones around ponds can offer suitable habitat for some amphibian species and can improve the quality of the aquatic environment for some sensitive local amphibians