Climate Policy Uncertainty and Investment Risk [electronic resource] /
International Energy Agency.
International Energy Agency.
Blyth, William.
Yang, Ming,1956-
Bradley, Richard.
Paris : OECD Publishing,
2007.
Our climate is changing. Less certain, however, is the timing and magnitude of climate change, and the cost of transition to a low-carbon world. This book identifies how climate change policy uncertainty may affect investment behaviour in the power sector. For power companies, where capital stock is intensive and long-lived, those risks rank among the biggest and can create an incentive to delay investment. Our analysis results show that the risk premiums of climate change uncertainty can add 40% of construction costs of the plant for power investors, and 10% of price surcharges for the electricity end-users. Climate Policy Uncertainty and Investment Risk tells what can be done in policy design to reduce these costs.
Table of contents; Executive Summary; INTRODUCTION; APPROACH TO QUANTIFYING UNCERTAINTY; INVESTMENT THRESHOLDS; COMPANY PERSPECTIVES ON MANAGING RISKS; IMPLICATIONS FOR POLICY MAKERS; APPENDIX 1 - TECHNOLOGY ASSUMPT IONS AND RESULTS SUMMARY; APPENDIX 2 - TECHNOLOGY INTERACTION EFFECTS; APPENDIX 3 - COMPANIES CONSULTED DURING THE STUDY; REFERENCES
"Researched and written by Dr. William Blyth ... Dr. Ming Yang and Dr. Richard Bradley."--Acknowledgements.
Includes bibliographical references (p. 139-142).
Our climate is changing. Less certain, however, is the timing and magnitude of climate change, and the cost of transition to a low-carbon world. This book identifies how climate change policy uncertainty may affect investment behaviour in the power sector. For power companies, where capital stock is intensive and long-lived, those risks rank among the biggest and can create an incentive to delay investment. Our analysis results show that the risk premiums of climate change uncertainty can add 40% of construction costs of the plant for power investors, and 10% of price surcharges for the electricity end-users. Climate Policy Uncertainty and Investment Risk tells what can be done in policy design to reduce these costs.
Climatic changes
Climatic changes
Energy policy.
Energy industries
Investments