ECN publication
Including climate change in energy investment decisions
Published by: Publication date:
ECN Policy Studies 1995
ECN report number: Document type:
ECN-C--95-073 ECN publication
Number of pages: Full text:
87 Download PDF  

To properly take climate change into account in the analysis of energyinvestment decisions, it is required to apply decision analysis methods that are capable of considering the specific characteristics of climate change (large uncertainties, long term horizon). Such decision analysis methods do exist. They can explicitly include evolving uncertainties, multi-stage decisions, cumulative effects and risk averse attitudes. Various methods are considered in this report and two of these methods have been selected: hedging calculations and sensitivity analysis. These methods are applied to illustrative examples, and its limitations are discussed. The examples are (1a) space heating and hot water for new houses from a private investor perspective and (1b) as example (1a) but from a government perspective, (2) electricity production with an integrated coal gasification combined cycle (ICGCC) with or without CO2 removal, and (3) national energy strategy to hedge for climate change. 9 figs., 21 tabs., 42 refs., 1 appendix

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