Using ex post data to estimate the hurdle rate of abatement investments - an application to sulfur emissions from the Swedish pulp and paper industry and energy sector

Åsa Löfgren (), Katrin Millock () and Celine Nauges
Additional contact information
Åsa Löfgren: GU - Göteborgs Universitet = University of Gothenburg
Katrin Millock: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

Post-Print from HAL

Abstract: We propose a method for estimating hurdle rates for firms' investments in pollution abatement technology, using ex post data. The method is based on a structural option value model where the future price of polluting fuel is the major source of uncertainty facing the firm. The econometric procedure is illustrated using a panel of firms from the Swedish pulp and paper industry, and the energy and heating sector from 2000 to 2003. The results indicate a hurdle rate of investment of 2.9 in the pulp and paper industry and 3.4 in the energy and heating sector.

Keywords: Option value; fuel price uncertainty; investment decision; pollution abatement; panel data; pulp and paper industry; energy and heating sector.; energy and heating sector; Valeur d'option; volatilité du prix de l'énergie; décision d'investissement; technologies propres; données de panel. (search for similar items in EconPapers)
Date: 2008-03
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00261523v1
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in 2008

Downloads: (external link)
https://shs.hal.science/halshs-00261523v1/document (application/pdf)

Related works:
Working Paper: Using ex post data to estimate the hurdle rate of abatement investments - an application to sulfur emissions from the Swedish pulp and paper industry and energy sector (2008)
Working Paper: Using ex post data to estimate the hurdle rate of abatement investments - an application to sulfur emissions from the Swedish pulp and paper industry and energy sector (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00261523

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().