IDEAS home Printed from https://ideas.repec.org/a/kap/enreec/v83y2022i1d10.1007_s10640-021-00616-3.html
   My bibliography  Save this article

The Role of Industrial and Market Symbiosis in Stimulating CO2 Emission Reductions

Author

Listed:
  • Tine Compernolle

    (University of Antwerp
    Royal Belgian Institute of Natural Sciences)

  • Jacco J. J. Thijssen

    (University of York)

Abstract

An increasing concern for climate change puts pressure on industrial firms to achieve carbon emission reductions. These could be realized through cooperation among firms in industrial chains, which leads to industrial symbiosis. By taking a real options approach, we make the timing component of the investment decisions explicit. This is important in assessing the impact of carbon-reducing investment over a specific time-span. We show that a joint venture between a CO2 emitting firm and a firm that can use the CO2 will result in a higher probability that an investment in CO2 capture will take place within a specific time period, which reduces the amount of CO2 emitted substantially. We also show that, in addition to industrial symbiosis, cooperation between firms can benefit from “market symbiosis” as well, in the sense that investments are more likely to take place in markets that are positively correlated. This is an important result, given that the EU has set binding targets to its Member States for reducing their emissions.

Suggested Citation

  • Tine Compernolle & Jacco J. J. Thijssen, 2022. "The Role of Industrial and Market Symbiosis in Stimulating CO2 Emission Reductions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 83(1), pages 171-197, September.
    • Handle: RePEc:kap:enreec:v:83:y:2022:i:1:d:10.1007_s10640-021-00616-3
    DOI: 10.1007/s10640-021-00616-3
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10640-021-00616-3
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10640-021-00616-3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Valentina Bosetti & Carlo Carraro & Massimo Tavoni, 2012. "Timing of Mitigation and Technology Availability in Achieving a Low-Carbon World," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 51(3), pages 353-369, March.
    2. Bicer, Isik & Hagspiel, Verena, 2016. "Valuing quantity flexibility under supply chain disintermediation risk," International Journal of Production Economics, Elsevier, vol. 180(C), pages 1-15.
    3. Henriette Naims, 2020. "Economic aspirations connected to innovations in carbon capture and utilization value chains," Journal of Industrial Ecology, Yale University, vol. 24(5), pages 1126-1139, October.
    4. Banerjee, Shantanu & Güçbilmez, Ufuk & Pawlina, Grzegorz, 2014. "Optimal exercise of jointly held real options: A Nash bargaining approach with value diversion," European Journal of Operational Research, Elsevier, vol. 239(2), pages 565-578.
    5. Avinash K. Dixit & Robert S. Pindyck, 1994. "Investment under Uncertainty," Economics Books, Princeton University Press, edition 1, number 5474.
    6. Fahimnia, Behnam & Sarkis, Joseph & Davarzani, Hoda, 2015. "Green supply chain management: A review and bibliometric analysis," International Journal of Production Economics, Elsevier, vol. 162(C), pages 101-114.
    7. Boomsma, Trine Krogh & Linnerud, Kristin, 2015. "Market and policy risk under different renewable electricity support schemes," Energy, Elsevier, vol. 89(C), pages 435-448.
    8. Ghosh, Debabrata & Shah, Janat, 2015. "Supply chain analysis under green sensitive consumer demand and cost sharing contract," International Journal of Production Economics, Elsevier, vol. 164(C), pages 319-329.
    9. Zhang, Bin & Wang, Zhaohua, 2014. "Inter-firm collaborations on carbon emission reduction within industrial chains in China: Practices, drivers and effects on firms' performances," Energy Economics, Elsevier, vol. 42(C), pages 115-131.
    10. Jiunn-Rong Chiou & Jin-Li Hu, 2001. "Environmental Research Joint Ventures under Emission Taxes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 20(2), pages 129-146, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Noshchenko, Olga & Hagspiel, Verena, 2024. "Environmental and economic multi-objective real options analysis: Electrification choices for field development investment planning," Energy, Elsevier, vol. 295(C).
    2. Lamberts-Van Assche, Hanne & Lavrutich, Maria & Compernolle, Tine & Thomassen, Gwenny & Thijssen, Jacco J.J. & Kort, Peter M., 2023. "CO2 storage or utilization? A real options analysis under market and technological uncertainty," Journal of Environmental Economics and Management, Elsevier, vol. 122(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lukas, Elmar & Mölls, Sascha & Welling, Andreas, 2016. "Venture capital, staged financing and optimal funding policies under uncertainty," European Journal of Operational Research, Elsevier, vol. 250(1), pages 305-313.
    2. Sun, Bo & Fan, Boyang & Zhang, Yifan & Xie, Jingdong, 2023. "Investment decisions and strategies of China's energy storage technology under policy uncertainty: A real options approach," Energy, Elsevier, vol. 278(PA).
    3. Compernolle, Tine & Kort, Peter M. & Thijssen, Jacco J.J., 2022. "The effectiveness of carbon pricing: The role of diversification in a firm’s investment decision," Energy Economics, Elsevier, vol. 112(C).
    4. Yuxue Yang & Xuejiao Tan & Yafei Shi & Jun Deng, 2023. "What are the core concerns of policy analysis? A multidisciplinary investigation based on in-depth bibliometric analysis," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-12, December.
    5. Di Corato, Luca & Moretto, Michele & Rossini, Gianpaolo, 2017. "Financing flexibility: The case of outsourcing," Journal of Economic Dynamics and Control, Elsevier, vol. 76(C), pages 35-65.
    6. Gan Wan & Gang Kou & Tie Li & Feng Xiao & Yang Chen, 2020. "Pricing Policies in a Retailer Stackelberg O2O Green Supply Chain," Sustainability, MDPI, vol. 12(8), pages 1-16, April.
    7. Bigerna, Simona & Hagspiel, Verena & Kort, Peter M. & Wen, Xingang, 2023. "How damaging are environmental policy targets in terms of welfare?," European Journal of Operational Research, Elsevier, vol. 311(1), pages 354-372.
    8. M. Moretto & G. Rossini, 2015. "Vertical flexibility, outsourcing and the financial choices of the firm," Working Papers wp1009, Dipartimento Scienze Economiche, Universita' di Bologna.
    9. Kozlova, Mariia, 2017. "Real option valuation in renewable energy literature: Research focus, trends and design," Renewable and Sustainable Energy Reviews, Elsevier, vol. 80(C), pages 180-196.
    10. Ata Allah Taleizadeh & Milad Shahriari & Shib Sankar Sana, 2021. "Pricing and Coordination Strategies in a Dual Channel Supply Chain with Green Production under Cap and Trade Regulation," Sustainability, MDPI, vol. 13(21), pages 1-18, November.
    11. Loïc Weerdt & Tine Compernolle & Verena Hagspiel & Peter Kort & Carlos Oliveira, 2022. "Stepwise Investment in Circular Plastics Under the Presence of Policy Uncertainty," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 83(2), pages 413-443, October.
    12. Syed Asif Raza, 2022. "A bibliometric analysis of pricing models in supply chain," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 21(2), pages 228-251, April.
    13. Sendstad, Lars Hegnes & Chronopoulos, Michail, 2016. "Sequential Investment in Emerging Technologies under Policy Uncertainty," Discussion Papers 2016/10, Norwegian School of Economics, Department of Business and Management Science.
    14. Lamberts-Van Assche, Hanne & Lavrutich, Maria & Compernolle, Tine & Thomassen, Gwenny & Thijssen, Jacco J.J. & Kort, Peter M., 2023. "CO2 storage or utilization? A real options analysis under market and technological uncertainty," Journal of Environmental Economics and Management, Elsevier, vol. 122(C).
    15. Ganhammar, Kajsa, 2021. "The effect of regulatory uncertainty in green certificate markets: Evidence from the Swedish-Norwegian market," Energy Policy, Elsevier, vol. 158(C).
    16. Wen, Xingang & Hagspiel, V. & Kort, Peter M., 2017. "Subsidized Capacity Investment under Uncertainty," Other publications TiSEM 4c7a7c87-a34c-4934-a910-5, Tilburg University, School of Economics and Management.
    17. Nagy, Roel L.G. & Hagspiel, Verena & Kort, Peter M., 2021. "Green capacity investment under subsidy withdrawal risk," Energy Economics, Elsevier, vol. 98(C).
    18. Linnerud, Kristin & Simonsen, Morten, 2017. "Swedish-Norwegian tradable green certificates: Scheme design flaws and perceived investment barriers," Energy Policy, Elsevier, vol. 106(C), pages 560-578.
    19. Cai, Jianhu & Sun, Haining & Shang, Jennifer & Hegde, Gajanan G., 2023. "Information structure selection in a green supply chain: Impacts of wholesale price and greenness level," European Journal of Operational Research, Elsevier, vol. 306(1), pages 34-46.
    20. Lukas, Elmar & Thiergart, Sascha, 2019. "The interaction of debt financing, cash grants and the optimal investment policy under uncertainty," European Journal of Operational Research, Elsevier, vol. 276(1), pages 284-299.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:enreec:v:83:y:2022:i:1:d:10.1007_s10640-021-00616-3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.