Optimal energy R&D portfolio investments in response to a carbon tax

IEEE Transactions on Engineering Management

Volumn 57, Issue 4, 2010, Pages 547-559

  Shittu, Ekundayo ^a   Baker, Erin ^b  

^a TULANE UNIVERSITY   (United States)

^b University of Massachusetts   (United States)

Author keywords

Carbon tax; decision making under uncertainty; elasticity; energy R D; investment

Indexed keywords

A-CARBON; CARBON TAXES; CLIMATE POLICY; DECISION MAKERS; DECISION-MAKING UNDER UNCERTAINTY; ECONOMIC RESOURCES; ELASTICITY OF SUBSTITUTION; ENERGY INPUTS; ENERGY TECHNOLOGIES; INVESTMENT ALLOCATIONS; INVESTMENT DECISIONS; MITIGATION OPTIONS; MULTI-PERIOD; OPTIMAL ALLOCATION; OPTIMAL ENERGY; OPTIMAL INVESTMENTS; POLICY MAKERS; PORTFOLIO INVESTMENT;

DECISION MAKING; ECONOMICS; ELASTICITY; INDUSTRY; INNOVATION; OPTIMIZATION; TAXATION;

INVESTMENTS;

EID: 77958506609     PISSN: 00189391     EISSN: None     Source Type: Journal    
DOI: 10.1109/TEM.2009.2023107     Document Type: Conference Paper

References (32)

1. C. H. Loch and S. Kavadias, "Dynamic portfolio selection of NPD programs using marginal returns," Manage. Sci., vol.48, no.10, pp. 1227- 1241, 2002.
2. M. Dickinson, A. Thornton, and S. Graves, "Technology portfolio management: Optimizing interdependent projects over multiple time periods," IEEE Trans. Eng. Manage., vol.48, no.4, pp. 518-527, Nov. 2001.
3. J. Edmonds, J. Clarke, J. Dooley, S. H. Kim, and S. J. Smith, "Stabilization of CO2 in a B2 world: Insights on the roles of carbon capture and disposal, hydrogen, and transportation technologies," Energy Econ., vol.26, pp. 517-537, 2004.
4. E. Baker, H. Chon, and J. Keisler, "Advanced solar R&D: Applying expert elicitations to inform climate policy," Energy Econ., vol.13, Suppl. 1, pp. S37-S49, 2009.
5. A. Brenkert, S. Smith, S. Kim, and H. Pitcher, "Model documentation for the MiniCAM," Pacific Northwest Nat. Lab., Richland, WA, Tech. Rep. PNNL-14337, 2003.
6. G. Fishelson and B. Kroetch, "Energy R&D portfolio analysis," Resour. Energy, vol.11, pp. 195-213, 1989.
7. E. Baker and E. Shittu, "Profit-maximizing R&D in response to a random carbon tax," Resour. Energy Econ., vol.28, pp. 160-180, 2006.
8. G. Blanford and L. Clarke, "On the optimal allocation of R&D resources for climate change technology development," Lawrence Livermore Nat. Lab., Livermore, CA, Tech. Rep. UCRL-TR-200982, 2003.
9. W. A. Magat, "Pollution control and technological advance: A dynamic model of the firm," J. Environ. Econ. Manage., vol.1, no.5, pp. 1-25, 1978.
10. S. R. Milliman and R. Prince, "Firm incentives to promote technological change in pollution control," J. Environ. Econ. Manage., vol.17, pp. 247- 265, 1989.
11. P. Roussel, K. Saad, and T. Erickson, Third Generation R&D: Managing the Link to Corporate Strategy. Boston, MA: Harvard Business School Press, 1991.
12. D. Granot and D. Zuckerman, "Optimal sequencing and resource allocation in research and development projects," Manage. Sci., vol.37, no.2, pp. 140-156, 1991.
13. J. Keisler,W. Buehring, P. McLaughlin,M. Robershotte, and R.Whitfield, "Allocating vendor risks in the Hanford wasted cleanup," Interfaces, vol.34, no.3, pp. 180-190, 2004.
14. G. Berzinsh, N. A. Nechval, and M. Purgailis, "Optimal investment decisions for a set of projects under conditions of uncertainty," in Proc. IEEE Int. Conf. Ind. Technol. (ICIT 2006), pp. 911-916.
15. C. H. Loch, M. T. Pich, C. Terwiesch, and M. Urbschat, "Selecting R&D projects at BMW: A case study of adopting mathematical programming models," IEEE Trans. Eng.Manage., vol.48, no.1, pp. 70-80, Feb. 2001.
16. G. J. Beaujon, S. P. Marin, and G. C.McDonald, "Balancing and optimizing a portfolio of R&D projects," Naval Res. Logistics, vol.48, pp. 18-40, 2001.
17. S. Kavadias andC.H. Loch, Project SelectionUnderUncertainty: Dynamically Allocating Resources to Maximize Value. Norwell, MA: Kluwer, 2003.
18. R. Cooper, S. J. Edgett, and E. J. Kleinschmidt, Portfolio Management for New Products. Reading, MA: Perseus Books, 1998.
19. M. L. Weitzman, "Optimal search for best alternative," Econometrica, vol.47, no.3, pp. 641-654, 1979.
20. A. Gritsevskyi and N. Nakicenovic, "Modeling uncertainty of induced technological change," Energy Policy, vol.28, pp. 907-921, 2000.
21. E. Baker, L. Clarke, and J.Weyant, "Optimal technology R&D in the face of climate uncertainty," Climatic Change, vol.78, pp. 157-179, 2006.
22. W. A. Pizer, "The optimal choice of climate change policy in the presence of uncertainty," Resour. Energy Econ., vol.21, pp. 255-287, 1999.
23. A. Grubler and A. Gritsevskyi, "A model of endogenous technological change through uncertain returns on innovation," in Technological Change and the Environment, A. Grubler, N. Nakicenovic, and W. D. Nordhaus, Eds. Washington, DC: RFF, 2002, pp. 280-319.
24. A. K. Dixit and R. S. Pindyck, InvestmentUnderUncertainty. Princeton, NJ: Princeton Univ. Press, 1994.
25. R. J. Caballero, "On the sign of the investment-uncertainty relationship," Amer. Econ. Rev., vol.81, pp. 279-288, 1991.
26. V. Bosetti and M. Tavoni, Uncertain R&D, Backstop Technology and GHGs Stabilization. Milan, Italy: Fondazione Eni Enrico Mattei, 2007.
27. K. A. Hassett and G. E. Metcalf, "Investment with uncertain tax policy: Does random tax policy discourage investment?" Econ. J., vol.109, pp. 372-393, 1999.
28. E. Baker and E. Shittu, "Uncertainty and endogenous technical change in climate policy models," Energy Econ., vol.30, pp. 2817-2828, 2008.
29. D. Popp, "ENTICE: Endogenous technological change in the DICE model of global warming," J. Environ. Econ. Manage., vol.48, pp. 742-768, 2004.
30. L. H. Goulder and S. H. Schneider, "Induced technological change and the attractiveness of CO2 abatement policies," Resour. Energy Econ., vol.21, pp. 211-253, 1999.
31. M. Rothschild and J. Stiglitz, "Increasing risk I: A definition," J. Econ. Theory, vol.2, pp. 225-243, 1970.
32. M. Rothschild and J. Stiglitz, "Increasing risk II: Its economic consequences," J. Econ. Theory, vol.3, pp. 66-84, 1971.