Green Technology Investment Research Articles

Low-carbon Asia: technical contributions to an ambitious goal for sustainability

Despite a substantial effort orchestrated to accelerate green development worldwide, many challenges remain, notably in Asia where the economic growth has been accelerating. Decoupling high greenhouse gases emission without compromising the economic growth is a great challenge. The coordinated efforts at different levels covering from top-down and bottom-up measures are essential to implement the low-carbon emissions scenarios with reduced carbon footprints. Efforts such as through governmental policy and incentives, investment in green technology and promotional activities by NGOs to promote green transformation towards low-carbon emissions development are ongoing. The progress has not been always fast enough due to the gaps among the key stakeholders including the central and local governments, experts and business entities and the community at large. Organisation of the international conference to promote environmentally friendly and sustainable transformation is important to bridge these gaps. The conference series of International Conference of Low Carbon Asia 2015 (ICLCA’15) aims to accelerate the green development in Asia. The 1st ICLCA’15 conference was held in Johor Bahru, Malaysia, from 11 to 13 October 2015, and it was held in conjunction with the 4th Annual Meeting of Low Carbon Asia Research Network (LoCARNet) in Malaysia with the theme “Positive Action from Asia—Towards COP21 and Beyond” . The LoCARNet is a network for multi-layered stakeholders to promote research cooperation related to low-carbon growth and policy making. The double event was attended by 200 international scientists and policy makers from research institutions, government agencies, municipalities, universities and NGOs including from Cambodia, China, Hungary, India, Indonesia, Japan, Laos, Malaysia, Philippines, Singapore, Thailand and Vietnam. The double event culminated in the launch of a regional Low-carbon Emission Declaration, the “LoCARNet Iskandar Malaysia Declaration” that was disseminated at the 21st yearly session of the Conference of the Parties (COP21), Paris, France .

Low carbon warehouse management under cap-and-trade policy

Green warehouse management plays a significant part in developing a carbon efficient supply chain. This research examines the behaviour change in warehouse management decisions under the cap-and-trade emission policy and explores the role of green technology investment in managing the trade-offs between the economic and environment performances of warehousing operations. This study analyses the optimal decisions in warehouse management and technology investment under the cap-and-trade emissions policy to assist the practitioners in making efficient decisions. Moreover, this study also investigates the effect of initial carbon emission allowance and transaction costs of the unit carbon emission trading with the outside market, on the economic and environment performances of warehousing operations. The findings of this study provide useful insights in greening the warehousing operations and reducing the carbon emissions.

Optimal strategies for manufacturer with strategic customer behavior under carbon emissions-sensitive random demand

Purpose – The purpose of this paper is to investigate the manufacturer’s production, pricing and green technology investment decision problem when strategic customer behavior and carbon emissions-sensitive random demand is taken into consideration and discuss the impact of carbon emissions-sensitive demand on the manufacturer’s operation strategies, total carbon emissions and maximum expected profit. Design/methodology/approach – The authors formulate a model to introduce carbon emissions-sensitive demand into the newsvendor framework with strategic customer behavior. The authors characterize the rational expectations equilibrium to derive the optimal solutions to the manufacturer. The authors analyze the effects of carbon emissions-sensitive demand on the manufacturer’s optimal strategies, total carbon emissions and maximum expected profit by comparative analysis. Findings – The authors obtain the manufacturer’s optimal production, pricing and green technology investment strategies under rational expectations equilibrium in scenario of price-sensitive demand and that of carbon emissions-sensitive demand, respectively. The authors find that as customer demand changes from price-sensitive demand to carbon emissions-sensitive demand, the manufacturer’s optimal prices are the same but optimal production quantity, optimal unit carbon emissions and maximum expected profit go down. Though the total emissions decrease, the carbon emissions reduction would not increase as the demand is more carbon emissions-sensitive. Whether it increases or decreases depends on the model parameters. Originality/value – Carbon emissions-sensitive demand and strategic customer behavior are considered simultaneously in an integrated model. The result can guide the manufacturer decision-making. The proposed model are hoped to shed light to the future works in the field of sustainable supply chain management.

The behavioural aspect of green technology investments: A general positive model in the context of heterogeneous agents

Studies report that firms do not invest in cost-effective green technologies. While economic barriers can explain parts of the gap, behavioural aspects cause further under-valuation. This could be partly due to systematic deviations of decision-making agents’ perceptions from normative benchmarks, and partly due to their diversity. This paper combines available behavioural knowledge into a simple model of technology adoption. Firms are modelled as heterogeneous agents with different behavioural responses. To quantify the gap, the model simulates their investment decisions from different theoretical perspectives. While relevant parameters are uncertain at the micro-level, using distributed agent perspectives provides a realistic representation of the macro adoption rate. The model is calibrated using audit data for proposed investments in energy efficient electric motors. The inclusion of behavioural factors reduces significantly expected adoption rates: from 81% using a normative optimisation perspective, down to 20% using a behavioural perspective. The effectiveness of various policies is tested.

Green Entrepreneurship: The Emerging Paradigm for Sustainable Growth and Development in IndiaA Study of the Millennials

Objectives: This paper tries to study and understand the potential opportunities and challenges faced by green entrepreneurs in India. It attempts to provide directions and a viable solutions to prevent further ecological degradation through green entrepreneurship. Methods/ Statistical Analysis: The research, being, exploratory in nature, utilizes both primary and secondary data for the purpose. Primary data has been collected from millennial, student respondents, who are either graduates or pursuing their final year of post-graduation in management. A sample size of 130 students have been taken through random sampling method. Factor loading was employed and Analysis of Variance (ANOVA) and a hypothesis test along with a correlation coefficient between factors also helped the study to draw conclusions with regard to factors that prove to be motivational and also the key barriers to green entrepreneurship in India. Findings: The study reveals that in general, millennials possess high level of environmental awareness. However, a weak Correlation can be inferred between gender, age and environmental knowledge, beliefs and attitudes. Environmental concerns were measured on various issues and a standard factor analysis through weighted method indicated that high concerns significantly impacted the demand and supply of green products and several factors ranging from emerging opportunities, creative interventions, availability of technological alternatives were key motivational factors. Emergence of various sectors in Indian economy was found by the study as an emerging green driver to leverage existing resources, knowledge of green technology, a growing entrepreneurial climate. However, a factor analysis of the barriers to green entrepreneurship were found to be -the absence or limited knowledge of green technology and high investment costs , absence of funds to undertake risk in the sector along with inability to understand potential benefit accrued from green businesses is believed to be a serious discerning factor amongst the respondents. Application/ Improvements: Research is useful to understand the motivational factors as the study provides useful insights into consumer attitudes, beliefs and values which can be helpful to marketers and entrepreneurs to design their strategies.

Optimal Strategies for Low Carbon Supply Chain with Strategic Customer Behavior and Green Technology Investment

Climate change is mainly caused by excessive emissions of carbon dioxide and other greenhouse gases. In order to reduce carbon emissions, cap and trade policy is implemented by governments in many countries, which has significant impacts on the decisions of companies at all levels of the low carbon supply chain. This paper investigates the decision-making and coordination of a low carbon supply chain consisting of a low carbon manufacturer who produces one product and is allowed to invest in green technology to reduce carbon emissions in production and a retailer who faces stochastic demands formed by homogeneous strategic customers. We investigate the optimal production, pricing, carbon trading, and green technology investment strategies of the low carbon supply chain in centralized (including Rational Expected Equilibrium scenario and quantity commitment scenario) and decentralized settings. It is demonstrated that quantity commitment strategy can improve the profit of the low carbon supply chain with strategic customer behavior. We also show that the performance of decentralized supply chain is lower than that of quantity commitment scenario. We prove that the low carbon supply chain cannot be coordinated by revenue sharing contract but by revenue sharing-cost sharing contract.

Living on the Edge: How we converted challenges into profitable opportunities

In 2063, the Great Lakes–St. Lawrence River basin is Living on the Edge of system resilience, characterized by poor governance yet good environmental/economic balance. The Great Lakes region benefits from and depends upon human choices and natural forces outside the region pushing and pulling it toward that balance. Choices within the basin are insufficient to maintain system resilience, and there is minimal government involvement in Great Lakes governance. The Great Lakes region perseveres like a pampered but powerless slave, contributing value but lacking liberty. The predominant drivers of change that have brought the basin to this perpetual knife's-edge existence of dependency are the global economy, societal values, and technological innovation. Climate change, energy, and demographics in turn drive those drivers on a global scale, but the region itself has evaded the most extreme climate-change impacts, which proved highly variable through space and time. Global changes in energy demand resulted in the most massive investment in green energy technology in planetary history, dramatically shifting the global demand for wind, solar, wave, and nuclear power. Coupled with aggressive pro-business North American policies and endemic private-sector intellectual capital, the Great Lakes region reemerged as an economic engine to serve the demand. This shift occurred despite the death of cooperative federalism and after decades of ideological politics gutted science-based, citizen-participatory regulatory structures. Governance at local scales remains highly variable, so the Great Lakes region rides on the coattails of past policies. This scenario represents one of four described in the Great Lakes Futures Project.

Stochastic model-based framework for assessment of sustainable manufacturing technology

In recent years, manufacturing companies have been continually required to minimize energy usage, pollutant emissions, manufacturing costs and lead-time. Therefore most companies have realized the necessity of investing in green manufacturing technology. However, it is difficult to evaluate the benefit of a green technology investment. Although several technology evaluation and assessment methods have been developed, these methods are unsuitable for evaluating alternative green technologies and their long-term benefits. Moreover, estimating the future cash flow of a type of technology, which is one of the most important factors, is a difficult task since energy prices and environmental regulations have major uncertainties. Unfortunately, most technology evaluation methods do not currently consider future cash flows. In this research, we designed a new framework that can be used to evaluate green technology investment based on stochastic model; two investment cases were then evaluated using the framework to verify the reliability of the evaluation result and the framework usability.

CO2 emissions and economic activity: Short- and long-run economic determinants of scale, energy intensity and carbon intensity

We analyze the short-term and the long-term determinants of energy intensity, carbon intensity and scale effects for eight developed economies and two emerging economies from 1973 to 2007. Our results show that there is a difference between the short-term and the long-term results and that climate policy are more likely to affect emission over the long-term than over the short-term. Climate policies should therefore be aimed at a time horizon of at least 8 years and year-on-year changes in emissions contains little information about the trend path of emissions. In the long-run capital accumulation is the main driver of emissions. Productivity growth reduces the energy intensity while the real oil price reduces both the energy intensity and the carbon intensity. The real oil price effect suggests that a global carbon tax is an important policy tool to reduce emissions, but our results also suggest that a carbon tax is likely to be insufficient decouple emission from economic growth. Such a decoupling is likely to require a structural transformation of the economy. The key policy challenge is thus to build new economic structures where investments in green technologies are more profitable.

A product-mix decision model using green manufacturing technologies under activity-based costing

The purpose of this study is to assess how the integration of activity-based costing (ABC) and the theory of constraints (TOC), as well as the application of a mixed-integer programming (MIP) model, can assist in making decisions about product-mix using green manufacturing technologies (GMTs). This study proposes a mathematical programming model to analyze the profitability of a product-mix decision based on the ABC and TOC, with the adoption of new GMTs. Using a numerical example from a metal component parts manufacturer in the automotive industry, the findings of this study provide insight into the value of mathematical programming approaches for GMTs investment and product-mix decision making based on ABC systems while simultaneously improving the value of green manufacturing technology investments.

Deregulation and differentiation: Incumbent investment in green technologies

Integrating elements from industrial organization economics and the resource‐based view—coupled with path dependence as firm resources evolve over time, this paper suggests that deregulation may not always provide greater opportunities for incumbents, and the extent to which incumbents differentiate on the green dimension may be constrained by their prior resources, in particular, capabilities with respect to brown technologies and experiences with green technologies. Using data on U.S. investor‐owned electric utilities from 1992 to 2008, this paper finds that deregulation is associated with lower entry into the renewable generation market by incumbents compared to regulation. More capable firms using brown technologies, for example, coal‐based generation, are less likely to enter the renewable generation market. Also, incumbents are responsive to actual, not latent, demand for renewable energy. Copyright © 2013 John Wiley & Sons, Ltd.

Determinants of Green Innovation: The Impact of Internal and External Knowledge

Based on a comprehensive data set comprising 13 countries, 22 industries and a period of 30 years we investigate the impact of internal and external knowledge pools of both green and ‘other than green’ technologies on green patent activities. It turned out that the internal green knowledge stock is positively related to green patent activities with a considerably large marginal value. The country’s green knowledge stock and the green knowledge stock of the same industry in other countries are also positively related with industries’ green patent activities, although with a significantly lower marginal value. External ‘other than green’ knowledge stocks are negatively related with green inventions. The considerable greater marginal value for internal green knowledge stock indicates that a free-riding position on green technology investments of other industries in the same country or the same industry in other countries does not seem to be very promising in terms of green inventions. The negative marginal effect of external ‘other than green’ knowledge stocks and the positive marginal value of external green knowledge stocks indicate that country level policy measures to promote green knowledge formation would provide additional positive effects for green inventions on an industry level.

Venture Capital Opportunities in Green Building Technologies: A Strategic Analysis for Emerging Entrepreneurial Companies in South Florida and Latin America

AbstractVenture capital is an investment intended to finance high-risk companies, and particularly entrepreneurs such as those dedicated to the development of new and innovative technologies. Venture capitalists provide such investments because entrepreneurs may have difficulty obtaining loans from banks due to high interest rates, the risks involved in the technological arena, and the absence of a proven track record. However, the rate of success for venture capital investments has been unconvincing. Given this poor success rate, there is a need for comprehensive research to assist entrepreneurs and investors in understanding the opportunities and difficulties of start-up venture capital investments in green building technologies. This paper not only analyzes the current trends of venture capital investments in green building and construction technologies, but also outlines a potential course of action. The findings of the study show that the future of venture capital investment opportunities is very bri...

Using Auctions for Pollution Rights as Indirect Incentives for Investments in Green Technologies

Acquired wisdom has it that the allocation of pollution rights to firms hinders their willingness to undertake uncertain R&D projects for environmental-friendly technologies. We revisit this issue in a model where firms strategically choose whether to participate in an auction to attain pollution permits, or instead invest in green R&D, to show that, somewhat counterintuitively, a side effect of the auction is in fact that of fostering environmental R&D in an admissible range of the model parameters.

Learning from Europe on Climate Change

Click to increase image sizeClick to decrease image size Notes Stuart Wolpert, ‘Last Time Carbon Dioxide Levels Were This High: 15 Million Years Ago, Scientists Report’, ScienceDaily.com, 9 October 2009, http://www.sciencedaily.com/releases/2009/10/091008152242.htm. Intergovernmental Panel on Climate Change, Climate Change 2007: The Physical Science Basis, Working Group I Contribution to the Fourth Assessment Report (Cambridge: Cambridge University Press, 2007), Summary for Policymakers, pp. 2–3. For more on the precautionary principle and EU climate policy, see John R. Schmidt, ‘Why Europe Leads on Climate Change’, Survival: Global Politics and Strategy, vol. 50, no. 4, August–September 2008, pp. 83–96. Nicholas Stern, The Economics of Climate Change: The Stern Review (Cambridge: Cambridge University Press, 2006). ‘Europeans Attitudes Towards Climate Change’, Special Eurobarometer 313, July 2009, http://ec.europa.eu/public_opinion/archives/ebs/ebs_313_en.pdf. Pew Research Center for People and the Press, ‘Modest Support for “Cap and Trade” Policy: Fewer Americans See Solid Evidence of Global Warming’, 22 October 2009, http://people-press.org/reports/pdf/556.pdf. Treaty of Lisbon, Title XX: Energy, Article 176A (2), 2007/C 306/01, available at http://europa.eu/lisbon_treaty/full_text/index_en.htm. European Environment Agency, ‘EU Greenhouse Gas Emissions Fall for Third Consecutive Year’, Press release, 29 May 2009, http://www.eea.europa.eu/pressroom/newsreleases/2009-greenhouse-inventory-report. ‘National Inventory Report: Greenhouse Gases Sources and Sinks 1990–2007’, Submission by Greenhouse Gas Division, Environment Canada, to the United Nations Framework Convention on Climate Change, April 2009. Ben Furnas, ‘We Must Seize the Energy Opportunity or Slip Further Behind: A Primer on Global Competition in Green Technology Investments’, Center for American Progress, 20 April 2009. Additional informationNotes on contributorsAndrew HollandAndrew Holland is Programme Manager and Research Associate for the Transatlantic Dialogue on Climate Change and Security at the IISS.

Development of a Green Building Decision Support Tool: A Collaborative Process

In this paper, we discuss a collaborative process for developing a decision tool to support decisions around investment in green energy technologies. Our tool was developed specifically for the Hitchcock Center for the Environment, a local environmental education organization, and the development process began as an undergraduate student service learning project. Building on the student projects, we developed an Excel-based tool that allows users to select various combinations of technologies and instantly see the financial, environmental, and educational impacts of their choice. Given our initial parameters and the preferences of the Hitchcock Center staff, the optimal configuration included installing a biomass heating system and a composting toilet, but avoiding investment in other green technologies, yielding an annualized preference-adjusted cost of $5,252.58. Sensitivity analysis indicated that the optimal choice was not sensitive to environmental valuations, and only slightly sensitive to educational values. All participants in the process found the concept and practice of value elicitation to be useful and illuminating.

Jobs and the Environment Service Employees International Union (SEIU)

Noting that the U.S. is the largest emitter of greenhouse gases, the Service Employees International Union (SEIU) declares that the nation therefore "has a special responsibility to lead the way on emission controls and new investment in green technologies that can be adopted worldwide." The union has pledged to do its part and passed a resolution on the issues, incorporated here, at last year's annual convention.

Green Roof Valuation: A Probabilistic Economic Analysis of Environmental Benefits

Green (vegetated) roofs have gained global acceptance as a technologythat has the potential to help mitigate the multifaceted, complex environmental problems of urban centers. While policies that encourage green roofs exist atthe local and regional level, installation costs remain at a premium and deter investment in this technology. The objective of this paper is to quantitatively integrate the range of stormwater, energy, and air pollution benefits of green roofs into an economic model that captures the building-specific scale. Currently, green roofs are primarily valued on increased roof longevity, reduced stormwater runoff, and decreased building energy consumption. Proper valuation of these benefits can reduce the present value of a green roof if investors look beyond the upfront capital costs. Net present value (NPV) analysis comparing a conventional roof system to an extensive green roof system demonstrates that at the end of the green roof lifetime the NPV for the green roof is between 20.3 and 25.2% less than the NPV for the conventional roof over 40 years. The additional upfront investment is recovered at the time when a conventional roof would be replaced. Increasing evidence suggests that green roofs may play a significant role in urban air quality improvement For example, uptake of N0x is estimated to range from $1683 to $6383 per metric ton of NOx reduction. These benefits were included in this study, and results translate to an annual benefit of $895-3392 for a 2000 square meter vegetated roof. Improved air quality leads to a mean NPV for the green roof that is 24.5-40.2% less than the mean conventional roof NPV. Through innovative policies, the inclusion of air pollution mitigation and the reduction of municipal stormwater infrastructure costs in economic valuation of environmental benefits of green roofs can reduce the cost gap that currently hinders U.S. investment in green roof technology.

Emerging technologies in favour of sustainable agriculture

European agricultural systems are going through a modernisation process involving radical structural changes. To tackle these important challenges, technology foresight has been employed as a systematic, participatory, intelligence gathering exercise focusing on future R&D investments in sustainable agricultural systems and green technologies. Because reliable data on emerging technology are scarce, any assessment has to be based to a large extent on qualitative methods and on an operational conception of sustainability using priority indicators. The paper describes the Danish Green Technological Foresight on Environmental Friendly Agriculture (GTFEFA). It treats this as a case study and examines the way in which a group of interested parties arrived at recommendations on the application of a number of emerging agriculture-related technologies. Two questions are then addressed: Can technological foresight simultaneously: (1) systematically describe and evaluate the consequences of employing emerging technologies in order to choose between alternatives, and (2) prioritise investments in emerging technologies so as to favour innovation. The discussion here is intended to help meet the challenge of operationalising the term ‘sustainability’, so that environmental friendly agricultural technology can be assessed against priority indicators. Finally, it is suggested that, provided that clear criteria for assessing the sustainability of emerging technologies are identified and made explicit, technology foresight offers a space for dialogue and exploration in contested territory.

Environmental quality competition and eco-labeling

A three-stage game of investment, environmental quality provision and price competition is developed to study the impact of green technology investment (eco-labeling), in a duopoly model of vertical product differentiation. The firms’ incentives to invest in green technologies depend on their relative cost structure. When firms are identical with respect to fixed costs, both firms will always invest, but if one firm is more efficient in investing, then the other firm may or may not invest depending on the level of unit cost of investment. Quality competition will be tighter when the low-quality firm is more efficient, and looser when the high-quality firm is more efficient in investing. Socially optimal investment for both firms is always positive, but lower than in the duopoly solution. In the absence of environmental externalities, the quality dispersion chosen by profit maximizing firms may be too high or too low, while environmental externalities increase the possibility low-quality dispersion that is too low within the market solution. Finally, and importantly, ecolabeling can be used as a means of reducing excessive investment and increasing environmental quality that is too low.