IDEAS home Printed from https://ideas.repec.org/h/spr/sptchp/978-3-642-36623-9_5.html
   My bibliography  Save this book chapter

The Finance of Environmental Investments

In: Environmental Finance and Investments

Author

Listed:
  • Marc Chesney

    (University of Zurich)

  • Jonathan Gheyssens

    (University of Zurich)

  • Luca Taschini

    (London School of Economics and Political Science)

Abstract

A proper selection and valuation of investment (or disinvestment) projects is crucial for financial managers. This is particularly difficult in the context of risks, globalization of economy, technology changes, strong competition, and in the presence of information asymmetry and environmental constraints. In the last context, it is essential for governments to decide which policy to adopt in response to a threat to the environment and when to implement it. The decision making tool usually recommended by the corporate finance theory is the so called NPV (Net Present Value) approach. This conventional approach, generated by the neo-classical theory, does not fulfill the needs as it ignores the flexibility inherent to the decision making process and the dynamic aspects of project selection. As shown in this chapter, the real options approach provides a new and powerful decision making tool that overcomes the limitations of the traditional DCF (Discount Cash Flow) method, and permits a more appropriate valuation of investment projects related to the environment in particular.

Suggested Citation

  • Marc Chesney & Jonathan Gheyssens & Luca Taschini, 2013. "The Finance of Environmental Investments," Springer Texts in Business and Economics, in: Environmental Finance and Investments, edition 127, chapter 5, pages 93-146, Springer.
    • Handle: RePEc:spr:sptchp:978-3-642-36623-9_5
    DOI: 10.1007/978-3-642-36623-9_5
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    Citations

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


    Cited by:

    1. Brown, Marilyn A. & Li, Yufei & Soni, Anmol, 2020. "Are all jobs created equal? Regional employment impacts of a U.S. carbon tax," Applied Energy, Elsevier, vol. 262(C).
    2. Anca Simina POPESCU & Alina Georgiana HOLT, 2014. "The absorption of european funds for environmental protection during the period 2007-2013," Finante - provocarile viitorului (Finance - Challenges of the Future), University of Craiova, Faculty of Economics and Business Administration, vol. 1(16), pages 141-150, December.
    3. Wegener, Christoph & Kruse-Becher, Robinson & Klein, Tony, 2024. "EU ETS Market Expectations and Rational Bubbles," VfS Annual Conference 2024 (Berlin): Upcoming Labor Market Challenges 302359, Verein für Socialpolitik / German Economic Association.
    4. Yang Liu & Ling Tang, 2024. "Environmental Penalties, Internal and External Governance, and Green Innovation: Does the Deterrence Effect Work?," Sustainability, MDPI, vol. 16(16), pages 1-17, August.
    5. Simone Borghesi, 2020. "Satisfied or Reimbursed: An Innovative Index-Based Mechanism for the Environmental Protection of a Tourist Region," Sustainability, MDPI, vol. 12(21), pages 1-8, October.
    6. Xiaoyan Wang & Minggao Xue & Lu Xing, 2018. "Analysis of Carbon Emission Reduction in a Dual-Channel Supply Chain with Cap-And-Trade Regulation and Low-Carbon Preference," Sustainability, MDPI, vol. 10(3), pages 1-18, February.
    7. Wang, Xu & Zhang, Xiao-Bing & Zhu, Lei, 2019. "Imperfect market, emissions trading scheme, and technology adoption: A case study of an energy-intensive sector," Energy Economics, Elsevier, vol. 81(C), pages 142-158.
    8. Magdalena Ziolo & Beata Zofia Filipiak & Iwona Bąk & Katarzyna Cheba & Diana Mihaela Tîrca & Isabel Novo-Corti, 2019. "Finance, Sustainability and Negative Externalities. An Overview of the European Context," Sustainability, MDPI, vol. 11(15), pages 1-35, August.

    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:spr:sptchp:978-3-642-36623-9_5. 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.

    We have no bibliographic references for this item. You can help adding them by using 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.