Flobsion—Flexible Option with Benefit Sharing

15872 9 87358 2 248161 document 87358 ijfs-07-00022 (1).pdf application/pdf fbfd9bde86705729a810fb7d5c927a00 MD5 302870 2019-04-25 07:13:40 https://pure.iiasa.ac.at/id/eprint/15872/1/ijfs-07-00022%20%281%29.pdf 15872 1 1 application/pdf text en public cc_by_4

ijfs-07-00022 (1).pdf

published 87360 1 248173 document 87360 indexcodes.txt text/x-asm 7c46faf171af1070b56a9b708fde544f MD5 10694 2019-04-25 07:23:17 https://pure.iiasa.ac.at/id/eprint/15872/2/indexcodes.txt 15872 2 2 text/x-asm other Generate index codes conversion from text to indexcodes en public

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http://eprints.org/relation/isVersionOf https://pure.iiasa.ac.at/id/document/87358 http://eprints.org/relation/isVolatileVersionOf https://pure.iiasa.ac.at/id/document/87358 http://eprints.org/relation/issmallThumbnailVersionOf https://pure.iiasa.ac.at/id/document/87358 archive 353 disk0/00/01/58/72 2019-04-25 07:17:26 2021-08-27 17:31:41 2019-04-25 07:17:26 article show Khabarov N. 1850 0000-0001-5372-4668 Lubowski R. Krasovskii A. 8266 0000-0003-0940-9366 Obersteiner M. 7255 0000-0001-6981-2769 Flobsion—Flexible Option with Benefit Sharing pub prog_esm CO2; emissions offsetting; options; financial risk; benefit sharing; climate policy Global environmental goals and the Paris agreement declared the need to avoid dangerous climate change by reducing emissions of greenhouse gases with an ultimate goal to transform today’s policies and reach climate neutrality before the end of the century. In the medium to long-term, climate policies imply rising CO 2 price and consequent financial risk for carbon-intensive producers. In this context, there is a need for tools to buffer CO 2 prices within the period of transition to greener technologies when the emission offsetting markets expose high volatility. Contracts for optional future purchase of carbon credits could provide emitters with a cost-efficient solution to address existing regulatory risks. At the same time, this would help to create much needed financing for the projects generating carbon credits in the future. This work presents the concept of a flobsion—a flexible option with benefit sharing—and demonstrates its advantages in terms of risk reduction for both seller and buyer as compared to both a “do nothing” strategy (offsetting at future market price) and a traditional option with a fixed strike price. The results are supported analytically and numerically, employing as a benchmark the dataset on historical CO 2 prices from the European Emission Trading Scheme. Flobsion has the potential to extend the traditional option in financial applications beyond compliance markets. 2019-04-19 published MDPI 10.3390/ijfs7020022 151 164 219 public International Journal of Financial Studies 7 2 22 TRUE 2227-7072 FALSE no info:eu-repo/semantics/article