Related papers: Emission impossible: Balancing Environmental Conce…
Carbon matching aims to improve corporate carbon accounting by tracking emissions rather than energy consumption and production. We present a mathematical derivation of carbon matching using marginal emission rates, where the unit of…
The electricity industry has been one of the first to face technological changes motivated by sustainability concerns. Whilst efficiency aspects of market design have tended to focus upon market power concerns, the new policy challenges…
Algorithmic pricing is increasingly shaping market competition, raising concerns about its potential to compromise competitive dynamics. While prior work has shown that reinforcement learning (RL)-based pricing algorithms can lead to tacit…
We develop a market model in which products generate state-dependent potential hidden charges. Firms differ in their ability to realize this potential. Unlike firms, consumers do not observe the state. They try to infer hidden charges from…
A successful response to climate change needs vast investments in low-carbon research, energy, and sustainable development. Governments can drive research, provide environmental regulation, and accelerate global development, but the…
Global warming from carbon dioxide (CO2) is known to depend on cumulative CO2 emissions. We introduce a model of global expenditures on limiting cumulative CO2 emissions, taking into account effects of decarbonization and rising global…
We present a novel approach to the pricing of financial instruments in emission markets, for example, the EU ETS. The proposed structural model is positioned between existing complex full equilibrium models and pure reduced form models.…
Carbon abatement decisions are usually based on the implausible assumption of constant social preference. This paper focuses on a specific case of market and non-market goods, and investigates the optimal climate policy when social…
Carbon neutralization is an urgent task in society because of the global warming threat. And carbon trading is an essential market mechanics to solve carbon reduction targets. Macro carbon price prediction is vital in the useful management…
This paper explores stochastic control models in the context of decarbonization within the energy market. We study three progressively complex scenarios: (1) a single firm operating with two technologies-one polluting and one clean,(2)two…
Climate policy has become increasingly politicized in many countries including the US, with some political parties unwilling to pursue strong measures. Therefore, to be successful in mitigation, climate policies must be politically…
The European carbon market plays a pivotal role in the European Union's ambitious target of achieving carbon neutrality by 2050. Understanding the intricacies of factors influencing European Union Emission Trading System (EU ETS) market…
Electrification is contributing to substantial growth in U.S. commercial and industrial loads, but the cost and Scope 2 carbon emission implications of this load growth are opaque for both power consumers and utilities. This work describes…
As carbon pricing mechanisms like the EU Emissions Trading System are set to increase prices of energy consumption, software architects face growing pressure to design applications that operate within financially predictable emission…
We consider a retailer who buys energy in the wholesale market and resells it to final consumers. The retailer has to decide when to intervene to change the price he asks to his customers, in order to maximize his income. We model the…
Most finance studies are discussed on the basis of several hypotheses, for example, investors rationally optimize their investment strategies. However, the hypotheses themselves are sometimes criticized. Market impacts, where trades of…
Grid energy storage can help to balance supply and demand, but its financial viability and operational carbon emissions impact is poorly understood because of the complexity of grid constraints and market outcomes. We analyse the impact of…
The Inflation Reduction Act subsidizes the deployment of clean electricity, hydrogen production, and carbon capture and storage, which could enable additional actions by other federal, state, and local policymakers to reduce emissions.…
The combustion of coal, the most polluting form of energy, must be significantly curtailed to limit global average temperature increase to well below 2 degrees C. The effectiveness of carbon pricing is frequently undermined by sub-optimally…
If goals set under the Paris Agreement are met, the world may hold warming well below 2 C; however, parties are not on track to deliver these commitments, increasing focus on policy implementation to close the gap between ambition and…