Accounting for Different Uncertainties: Implications for Climate Investments?
The paper clarifies the link between changes in risk aversion and the effect on the consumption discount rate…
Étiqueté : risk aversion
Risk aversion and technology mix in an electricity market
This article analyzes the effect of risk and risk aversion on the long-term equilibrium technology mix in an electricity market. It develops a model where firms can invest in baseload plants with a fixed variable cost and peak plants with a random variable cost, and demand for electricity varies over time but is perfectly predictable…
Mitigation under long-term growth uncertainty
“Economic growth over the coming centuries is one of the major determinants of today’s optimal greenhouse gas mitigation policy. At the same time, long-run economic growth is highly uncertain. This paper is the first to evaluate optimal mitigation policy under long-term growth uncertainty in a stochastic integrated assessment model of climate change…”
Environmental policy and speculation on markets for emission permits
Speculators are active in large markets for emission permits such as those developing under the Kyoto Protocol…
