Investment in clean energy technologies under uncertainty

Project managerRolf Golombek
ClientNorges forskningsråd
Client project no.
ParticipantsKjell Arne Brekke
Finn Førsund
Simen Gaure
Michal Kaut
Sverre A. C. Kittelsen
Stein W. Wallace
Period2006 - 2012 (ended)

Project description

Development of clean energy technologies is a necessity in order to reduce greenhouse gas emissions radically without imposing excessive costs. Substantial uncertainty about future prices and regulatory regimes make, however, such investments a risky endeavor. Yet, with huge uncertainties analysis of energy markets disregarding uncertainties may be seriously misleading. The purpose of the present project is to study investment in clean energy technologies under uncertainty by developing a stochastic energy market model. The model is then used to assess the impact of different energy and environmental policies on investment behavior, in particular how the design of optimal instruments are affected by uncertainty.


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