Climate Policy Uncertainty and Investment Risk
Our climate is changing. Less certain, however, is the timing and magnitude of climate change, and the cost of transition to a low-carbon world. This book identifies how climate change policy uncertainty may affect investment behaviour in the power sector. For power companies, where capital stock is...
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Format: | eBook |
Language: | English |
Published: |
Paris
OECD Publishing
2007
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Online Access: | |
Collection: | OECD Books and Papers - Collection details see MPG.ReNa |
Summary: | Our climate is changing. Less certain, however, is the timing and magnitude of climate change, and the cost of transition to a low-carbon world. This book identifies how climate change policy uncertainty may affect investment behaviour in the power sector. For power companies, where capital stock is intensive and long-lived, those risks rank among the biggest and can create an incentive to delay investment. Our analysis results show that the risk premiums of climate change uncertainty can add 40% of construction costs of the plant for power investors, and 10% of price surcharges for the electricity end-users. Climate Policy Uncertainty and Investment Risk tells what can be done in policy design to reduce these costs |
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Physical Description: | 144 p. 16 x 23cm |
ISBN: | 9789264030152 |