57 research outputs found
Professional norms and risk-taking of bank employees : Do expectations of peersâ risk preferences matter?
Peer reviewedPostprin
Managing incentives for greenhouse gas emission reduction
The Paris Agreement sets out the goal of limiting the increase in global average temperature to
within 2°C. Incentive mechanisms and low-carbon policies, such as emission trading schemes
(ETS), feed-in tariffs, carbon taxation, renewable obligation and emission performance
standards, are key instruments for achieving greenhouse gas emissions reduction. The cap-and-trade
ETS is one of the most popular policy instruments in controlling greenhouse gas
emissions. The carbon price quoted from the ETS allowances price is usually considered by
investors as the economic value of carbon emissions in formulating a long-term investment
decision. However, the allowances price is currently quite low across jurisdictions. Thus, in
order to incentivise large-scale and long-term low-carbon investment, a clear and strong carbon
pricing signal is essential.
There are divergent but increasingly prevalent views that additional policies may affect carbon
prices, as the emission reduction effect of parallel policies would reduce the demand for
allowances in the ETS, thus lower carbon prices could hamper the ETSâs capacity to promote
low-carbon technologies over the medium and long term. This PhD study investigates how
parallel energy and climate policies might affect carbon pricing in ETS and illustrates
stakeholdersâ views on this impact. The study defines the âcross-over effectâ of parallel energy
and climate policies.
A two-stage survey, including a closed-form questionnaire followed by open interviews, was
conducted to elicit views and expectations of stakeholders on one of the carbon markets in
China, the Guangdong ETS pilot, with an emphasis on perspectives on how the ETS may
interact with other existing or proposed low-carbon and clean energy policies. Our survey
results show that academic stakeholders, more than stakeholders from other sectors, viewed
the policy interactions as a significant issue for developing a carbon market in China, and there
was a positive correlation between recognition of such policy interactions and the time spent
on energy saving and emission reduction policies. Relatively few respondents identified
correctly the fact that both increasing renewable targets and imposing a carbon tax in addition
to an existing ETS would be expected to depress prices in the ETS. Apart from government
respondents, all other key stakeholders generally lacked confidence in Chinaâs carbon markets,
due to their lack of knowledge and information about the market and their concerns regarding
uncertainties and failures in government policy and regulation. Subsequently, an empirical study was conducted to probe the underlying rationality of pricing
behaviour and the effect of policy interaction with low-carbon policy in seven ETS pilots in
China using ordinary least square and event-based regression. The empirical results show that,
first, crude oil and domestic liquid natural gas are positively linked to the allowance price in
the Beijing, Shanghai and Guangdong pilots, while coal price lacks explanatory power. Second,
extreme weather is positively correlated with Shenzhen carbon prices. Third, in contrast to
existing studies, a positive correlation is found between renewable energy supply and carbon
prices in the Tianjin carbon market, and low-carbon policy that intends to promote renewable
energy would increase carbon prices in the Guangdong pilot. Finally, ETS regulatory events,
such as the announcement on surrender date (adjustment) and offset limitation, will increase
price variations in the Shenzhen and Tianjin pilots respectively. Overall, the empirical results
currently indicate that ETS pilots in China are segmented, but not as rational as previous studies
suggest.
Finally, the potential benefits of linking emissions markets across countries and regions are
well recognised. In theory, a global market provides more flexibility for parties to achieve
reductions in emissions at the lowest marginal cost across all covered sectors. Therefore,
quantifying the impact of emission trading market linkage would generate essential references
for the forming of a global market. Driven by the above motivation, the GTAP-Energy (GTAPE)
model was employed to assess the impact of carbon market linkage. Our results indicate
that, although the abatement costs increase in the Chinese carbon market after the linkage, the
strong and robust carbon price could give investors a correct signal on the value of carbon
emission. Furthermore, a linkage between the Chinese carbon market and the international
markets leads to a significantly smaller GDP reduction in China, 0.04% compared to the non-linkage
scenario (0.88%). In addition, allowing multilateral trading of emissions among these
countries shifts the burden of the reduction away from oil products in the relatively carbon-efficient
economies towards coal in the less carbon-efficient regions. This induces a substantial
reduction of the marginal abatement costs in the above economies.
In summary, this PhD research investigates stakeholdersâ views on the Chinese carbon market
as well as interactions between energy and climate change policies; it also discovers the price
drivers for carbon prices in Chinaâs pilot ETSs and assesses the impact of including Chinese
ETSs in a global emission trading system. Moving forward, as the results suggest that the
Chinese pilot ETSs may not be rational and most market participants are not fully aware of the function of the carbon market since they merely fulfil the need for government. The next step
would be to discover whether there is a media effect driving carbon prices
Assessing the value of commercial building low-carbon retrofit in Edinburgh City in Scotland
The purpose of current work is to assess the economics in the retrofit of non-domestic buildings in the UK, and recommend policy mechanisms to bridge the gap. This paper gives an overview of evaluation methodologies, incl. the technology assessment mechanism, financial cash flow valuation method, and the novel real option approach for assessing the value of new buildings designed in a low carbon retrofit readiness status. Detailed analysis of potential benefits from retrofitting existing commercial buildings in Edinburgh City is carried out. Resultshows substantial financial value in retrofitting a buildingover a lifetime through assessing the option value.The economic viability of retrofitting a commercialbuilding to low carbon design in Edinburgh is proven to be very high. Thus, new buildings are proposed to design in a âLow Carbon Building Retrofit Readinessâ status (âLCB Readinessâ) and it would be beneficial to develop a standard orbest practice for low carbon design for commercialbuildings.link_to_OA_fulltex
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