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Climate Change and Corporate Innovation Processes
IWH Discussion Papers,
This discussion paper provides the contextual framework of the cumulative disser-tation on “Climate Change and Corporate Innovation Processes” at the Technical University of Dresden. It consists of six already published papers and articles. Because of the present public discussion on climate change, European industrial companies face new requirements. This mainly includes new claims, which are imposed on them by the enterprises’ operational environment. One way to respond to these new claims is adaptation through innovation. The overall objective of this thesis is to investigate how the perception of climate change on the part of stakeholders affects corporate innovation processes. In this context, these issues are examined both theoretically and empirically. The thesis thus contributes to various literary strands in the area of “entrepreneurial strategies for adapting to climate change.”
A Model for the Valuation of Carbon Price Risk
Antes, R.; Hansjürgen, B.; Letmathe, P.; Pickl, S. (Hrsg.), Emissions Trading - Institutional Design, Decision Making and Corporate Strategies (Second Edition),
Modeling the price risk of CO2 emission allowances is an important aspect of integral corporate risk management related to emissions trading. In this paper, a pricing model is developed which may be the basis for evaluating the risk of emission certificate prices. We assume that the certificate price is determined by the expected marginal CO2 abatement costs in the current trade period as well as by the long-term marginal abatement costs. The price risk is modeled on the basis of a mean reversion process. Due to uncertainties about the future state of the environment, we suppose that within one trade period erratic changes in the expected marginal abatement costs may occur leading to shifts in the price level. In addition to the parameter estimation, it is also an objective of this work to modify the mean reversion process so that such abrupt changes in the expected reversion level can be displayed. Because of the possibility of transferring spare allowances to a subsequent period we take into account the fact that the expected long run marginal abatement costs act as a lower limit for the price in the trading period.
Stochastic Income Statement Planning as a Basis for Risk Assessment in the Context of Emissions Trading
Greenhouse Gas Measurement and Management,
The introduction of the European emissions trading system means that those enterprises taking part have a new planning risk factor to consider – emissions allowance prices. In this article, we analyse how risk emerging from emissions trading can be considered in the stochastic income statement planning of corporations. Therefore, we explore which planned figures are affected by emissions trading. Moreover, we show an approach that models these positions in a planned profit and loss account, taking into account uncertainties and dependencies. Consequently, this model provides a basis for risk assessment and investment decisions in the uncertain environment of emissions trading.