Simulation of an uncertain emission market for greenhouse gases using agent-based methods

Nahorski, Zbigniew; Stańczak, Jarosław; Pałka, Piotr

doi:10.1007/s10584-013-1039-2

Cited by 7 publications

(2 citation statements)

References 20 publications

(30 reference statements)

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“…It is, however, reasonable to assume that an uncertain amount of CER has an influence on the buyer's decision. While an inclusion of this uncertainty in the buyer's compliance can be solved by adaptation of the methodology proposed in , and by that shortly to be presented in Nahorski et al (2014), the influence of uncertainty on the price negotiation process has not been previously analysed.…”

Section: Introductionmentioning

confidence: 99%

Uncertainties in Greenhouse Gas Inventories

Ometto¹,

Bun²,

Jonas³

et al. 2015

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Section: Introductionmentioning

confidence: 99%

Uncertainties in Greenhouse Gas Inventories

Ometto¹,

Bun²,

Jonas³

et al. 2015

View full text Add to dashboard Cite

“…It is, however, reasonable to assume that an uncertain amount of CER has an influence on the buyer's decision. While an inclusion of this uncertainty in the buyer's compliance can be solved by adaptation of the methodology proposed in Nahorski et al (2007), and by that shortly to be presented in Nahorski et al (2014), the influence of uncertainty on the price negotiation process has not been previously analysed.…”

mentioning

confidence: 99%

Pricing of uncertain certified emission reductions in a Chinese coal mine methane project with an extended Rubinstein-Ståhl model

Horabik

Nahorski

2014

Climatic Change

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The development of coal mine methane (CMM) projects is subject to various kinds of risk, one of these being their highly variable methane content. In this study, a new methodology is proposed to reflect the impact of this uncertainty on a negotiated Certified Emission Reduction (CER) price, which is based on the available information. To simulate a process of price negotiation the Rubinstein-Ståhl bargaining game is utilized, where a buyer's discount factor is unknown. It is assumed that a buyer's willingness to accomplish price negotiations depends on the CER uncertainty. The bargaining model has been extended by introducing dependence of its three parameters on the probability of a failure to fulfil the contracted CER amount. To quantify this probability, we develop a conditional distribution given information on the point estimate of methane amount for the project under consideration, and on the distribution of available estimates from coal mines having similar characteristics. The proposed approach is applied to a particular CMM capture and utilization project in Anhui province, China. The results indicate that the uncertainty influence is significant, particularly when the credibility of a seller increases, i.e. the probability of a failure to fulfil the project decreases. The analysis can be of use to both negotiating parties at an early stage of a comprehensive CMM project planning.

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Coordinating water conservation efforts through tradable credits: A proof of concept for drought response in the San Francisco Bay area

Gonzales

Ajami

Sun

2017

Water Resources Research

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Water utilities are increasingly relying on water efficiency and conservation to extend the availability of supplies. Despite spatial and institutional interdependency of many utilities, these demand‐side management initiatives have traditionally been tackled by individual utilities operating in isolation. In this study, we introduce a policy framework for water conservation credits that enables collaboration at the regional scale. Under the proposed approach, utilities have the flexibility to invest in water conservation measures that are appropriate for their specific service area. When utilities have insufficient capacity for local cost‐effective measures, they may opt to purchase credits, contributing to fund subsidies for utilities that do have that capacity and can provide the credits, while the region as a whole benefits from more reliable water supplies. This work aims to provide insights on the potential impacts of a water conservation credit policy framework when utilities are given the option to collaborate in their efforts. We model utility decisions as rational cost‐minimizing actors subject to different decision‐making dynamics and water demand scenarios, and demonstrate the institutional characteristics needed for the proposed policy to be effective. We apply this model to a counterfactual case study of water utility members of the Bay Area Water Supply and Conservation Agency in California during the drought period of June 2015 to May 2016. Our scenario analysis indicates that when the institutional structure and incentives are appropriately defined, water agencies can achieve economic benefits from collaborating in their conservation efforts, especially if they coordinate more closely in their decision‐making.

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Simulation of an uncertain emission market for greenhouse gases using agent-based methods

Cited by 7 publications

References 20 publications

Uncertainties in Greenhouse Gas Inventories

Uncertainties in Greenhouse Gas Inventories

Pricing of uncertain certified emission reductions in a Chinese coal mine methane project with an extended Rubinstein-Ståhl model

Coordinating water conservation efforts through tradable credits: A proof of concept for drought response in the San Francisco Bay area

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