In this paper we develop an economic model that explains the decision-making problem under uncertainty of an industrial firm that wants to invest in a process technology. More specifically, the decision is between making an irreversible investment in a combined heat-and-power production...

While cap-and-trade policies have been advocated as an efficient market-based approach in regulating greenhouse gas (GHG) emissions from the power sector, a major criticism is that the resulting GHG emissions permit prices may be volatile, adding one more layer of uncertainty to market...

One of the first actions of the Environmental Protection Agency after the declaration of the COVID-19 crisis in mid-March 2020 was to announce that it would relax its enforcement policies with respect to environmental reporting and violations during the time of the pandemic. Ostensibly this was...

Cost-Benefit Analysis (CBA) is a tool for assessing the welfare effects of changes in regulatory and investment interventions. While in many ways an effective approach, a significant drawback of CBA, however, is that it relies on estimates for variables that cannot be predicted with complete...

Following the first oil crisis, France launched the world’s largest ever nuclear energy program, commissioning 58 new reactors. These reactors are now reaching 40 years of age, the end of their technological lifetime. This places France at an energy policy crossroads: should the reactors be...

We propose a novel framework for the economic assessment of climate-change policy. Our main point of departure from existing work is the adoption of a "satisficing", as opposed to optimizing, modeling approach. Along these lines, we place primary emphasis on the extent to which different...

We propose a novel framework for the economic assessment of climate-change policy. Our main point of departure from existing work is the adoption of a "satisficing", as opposed to optimizing, modeling approach. Along these lines, we place primary emphasis on the extent to which different...

This paper investigates how uncertainty affects the optimal intertemporal accumulation of a stock externality using CO2 emissions and the greenhouse effect as a topical pars pro toto. More precisely, the evolution of the future temperature is assumed to follow an Ito-process with the drift...

There is a lot of forward looking work attempting to envisage the decarbonised energy system of the future as reflected with current interest in "smart grids". A central tenet behind most visions of the "smart grids" of the future are the price signals that financial and commodity markets will...