Investors‿reaction to the government credibility problem: A real option analysis of emission permit policy risk
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- 作者：Sang Baum Kanga ; skang21@stuart.iit.edu" class="auth_mail" title="E-mail the corresponding author ; Pascal Lé ; tourneaub ; 1 ; letournp@uww.edu" class="auth_mail" title="E-mail the corresponding author
- 关键词：Government credibility ; Climate change policy ; Emission trading ; Real option ; Compound option ; Least squares Monte Carlo simulation
- 刊名：Energy Economics
- 出版年：2016
- 出版时间：February 2016
- 年：2016
- 卷：54
- 期：Complete
- 页码：96-107
- 全文大小：665 K
文摘
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We study the effect of climate change policy risk on power plant investment.
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We extend the real option approach to study the government credibility risk.
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We shed light on operational flexibility in the presence of political risk.
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Government credibility risk on CO2 permits will reduce investment in green plants.
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Credibility issues with emission trading will either delay or hasten investment.