Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/263907 
Year of Publication: 
2022
Series/Report no.: 
Working Paper No. 019.2022
Publisher: 
Fondazione Eni Enrico Mattei (FEEM), Milano
Abstract: 
The way in which climate policy and climate risks are currently accounted for in financial and real investment decisions is inadequate. The paper demonstrates weaknesses in methods presently used and proposes an alternative that aims to bridge the duration gap between climate policy modeling and mitigation capital. The core tool is real options analysis combined with an Integrated Assessment Framework designed to capture the complex set of issues linking climate change, climate policy and the economy. The tools are meant for use in both capex decisions by corporations and portfolio decisions by investors. The tools will be a hedge against the risk of mitigation short squeeze occurring because investment is deferred beyond the 5 year or less timeframe of finance.
Subjects: 
Climate alpha
option value
abatement short squeeze
green transition
JEL: 
G11
G17
G18
Q54
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.