The doctoral dissertations of the former Helsinki University of Technology (TKK) and Aalto University Schools of Technology (CHEM, ELEC, ENG, SCI) published in electronic format are available in the electronic publications archive of Aalto University - Aaltodoc.
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Dissertation for the degree of Doctor of Science in Technology to be presented with due permission of the Department of Mechanical Engineering for public examination and debate in Auditorium K216 at Helsinki University of Technology (Espoo, Finland) on the 16th of December, 2005, at 12 noon.
Overview in PDF format (ISBN 951-22-7942-8) [437 KB]
Dissertation is also available in print (ISBN 951-22-7941-X)
This thesis explores how tradable greenhouse gas emission permit systems affect investments in heat and power generation. The research question is approached from a capital investor's or the regulator's perspective with six individual articles. Cap-and-trade and baseline-and-credit emissions trading systems are analyzed. The value of an emission permit and other relevant decision variables are treated as stochastic processes in a risk-adjusted framework. Models combining simulation and dynamic programming are presented to analyze single-firm problems with several stochastic variables. The approach extends the standard discounted cash flow analysis by taking into account the value of management's flexibility to adapt and revise later its decisions in response to market development. The implications are analyzed and discussed in association with several technologies. The thesis contributes to the research on emissions trading system design and on practical implications of emissions trading systems on investments in heat and power plants.
This thesis consists of an overview and of the following 6 publications:
Keywords: tradable permits, emissions trading, investment, heat plant, power plant
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© 2005 Helsinki University of Technology