In this paper, authors explore the effects of uncertainty on pricing of pollution permits, through the use of a dynamic model of pollution markets. Authors consider two major sources of uncertainty - that arising from the volatility of demand for the underlying resource and that coming from the...

In this paper authors present a preliminary approach to the evaluation of policies and projects based on current thinking on cost benefit analysis and real option methodology and the authors' recent work on the same subject. Authors start from the assumption that economic agents undertake...

In this paper, we explore the effects of dynamic uncertainty on the risk management of regulated industries and emission market. We consider as major sources of uncertainty the stochastic growth of demand for the industry output (e.g. electric energy) and the ensuing lack of information on the...

Society often sets social standards that define thresholds of damage to society or the environment above which compensation must be paid to the state or other parties. In this paper, we analyze the interdependence between the use of social standards and investment evaluation under dynamic...

Scientific progress offers tremendous potential benefits to society but also presents risks. While research focuses on how to manifest the benefits of any new technology, the outside community fears the consequences that technology may inadvertently have on social goods such as the environment,...