search query: @indexterm trading / total: 175
reference: 9 / 175
| Author: | Fan, L. Hobbs, B.F. Norman, C.S. |
| Title: | Risk aversion and CO2 regulatory uncertainty in power generation investment: policy and modeling implications |
| Journal: | Journal of Environmental Economics and Management
2010 : NOV, VOL. 60:3, p. 193-208 |
| Index terms: | investment uncertainty risk aversion economic policy simulation pricing air pollution trading |
| Language: | eng |
| Abstract: | We inspect a simulation of risk-averse producers facing uncertainty about future carbon dioxide emissions regulation when they make investment decisions in a competitive energy market. Investments are made under regulatory uncertainty, following the revelation of regulations and realization of the returns for producers. We study anticipated taxes, grandfathered permits and auctioned permits and demonstrate that some anticipated policies fuel investment in the relatively dirty technology. Beliefs about the policy instrument used for carbon pricing may be as important as the certainty that carbon will be priced. More generally, failing to consider risk aversion can bias policy analysis for the power sector. |
SCIMA