Arbeitspapier
Project-based carbon contracts: A way to finance innovative low-carbon investments
Low and uncertain carbon prices are often stated as a major obstacle for industrial sector investments in technologies to deliver deep emissions reductions. Project-based carbon contracts underwritten by national governments could addressregulatory risk, lower financing costs and strengthen incentives for emission reductions at investment and operation stage. In this paper design options for project-based carbon contracts are assessed using an analytical model capturing risk aversion of investors with a meanvariance utility function. The model is also used to assess how a combination with grant support for innovative projects can minimize overall costs of innovation policy. Savings in financing costs are quantified using a stylized project finance cash flow analysis.
- Language
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Englisch
- Bibliographic citation
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Series: DIW Discussion Papers ; No. 1714
Criteria for Decision-Making under Risk and Uncertainty
Energy: Government Policy
Climate; Natural Disasters and Their Management; Global Warming
Environmental Economics: Technological Innovation
Environmental Economics: Government Policy
Technological Change: Government Policy
carbon contract
innovation support
- Handle
- Last update
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20.09.2024, 8:25 AM CEST
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Richstein, Jörn C.
- Deutsches Institut für Wirtschaftsforschung (DIW)
Time of origin
- 2017