Credit Price Research Articles

Process Integration Technique for Targeting Carbon Credit Price Subsidy

Mitigating climate change requires a portfolio of strategies and the use of carbon dioxide removal techniques or negative emissions technologies (NETs) will be necessary to achieve to achieve this goal. However, the high implementation costs of advanced NETs lead to expensive carbon credits, hindering their broad acceptance and use. One potential solution involves governmental support through subsidies, aiming to boost the availability of NET-derived carbon credits. This research uses a graphical technique based on an extension of pinch analysis to identify the ideal subsidy level for carbon dioxide removal, taking into account factors such as carbon pricing, supply, and demand. The proposed approach modifies the limiting composite curve (LCC) methodology to accurately determine the optimal subsidy and establish the baseline amount of subsidized carbon dioxide removal needed. The approach enables the convenient and efficient construction of the LCC using a composite table algorithm. To illustrate the proposed methodology, two case studies composed of different NETs and demand sectors are investigated. The results show the most advantageous subsidy levels for these technologies, providing valuable insights to guide policymakers and investors in their decarbonization efforts. This research contributes to the development of effective governance and investment strategies by optimizing NET subsidy allocation. Such optimization is crucial for facilitating the widespread implementation of these technologies, which are in-line with the global efforts to mitigate climate change.

Towards net zero: Comprehensive approach for voluntary carbon trading among microgrids

In the context of growing focus over climate changes and promoting sustainability across a various range of fields, microgrids can play a significant role in global decarbonization endeavors, contributing to carbon neutrality and ultimately attaining net-zero emissions in the energy sector. The objective of this paper is to address the integration of voluntary carbon trading within microgrid communities, in the perspective to mitigate greenhouse gas (GHG) emissions and boost the integration of renewable energy sources (RES). Introducing five modular algorithms managing key aspects of carbon trading, the study engineers a comprehensive framework aiming to optimally orchestrate the Voluntary Carbon Market (VCM) within microgrids. Particularly, the developed algorithms address aspects such as market enrollment decision, optimal energy dispatch, managing the market transactions, sellers-buyers matching as well as the dynamic adjustment of carbon credit prices and emission taxes. The framework has been rigorously tested across three distinct scenarios. Results show that the developed VCM, with adequate configurations, has the potential to incentivize microgrids to curtail their GHG emissions, encourage the integration of more RES into their generation mix, and rewards the more proactive microgrids with substantial financial incentives.

PENGARUH HARGA JUAL DAN SYARAT KREDIT TERHADAP PENJUALAN KREDIT PT HOME CREDIT INDONESIA CABANG SURABAYA

As the economy changes after the pandemic storm in all countries, especially Indonesia, many parties move very quickly, everyone must survive to survive, from national business corporations to small and medium class MSMEs to develop their businesses. The development of the business provides significant benefits for the company or business, which has an impact on increasing company profits. The company's goal is to sell goods to consumers and users both directly and digitally, so it is necessary to carry out effective and efficient sales. Sales usually consist of sales of goods and services, both cash and credit. Research conducted by Syarial, (2015), shows that the results of his research have a positive and significant effect on purchasing decisions, in this case researchers purchase using credit sales. The rise of credit sales in various regions both online and offline, many people from various walks of life to follow the latest trend. Technological advances have made many digital platforms appear. One that is widely used because of the convenience provided is the sales application. Because of this phenomenon, researchers are interested in examining Credit Sales at PT Home Credit Indonesia Surabaya branch studied through credit prices and credit terms. The purpose of this thesis is to find out the selling price, credit interest rate affects the credit sales of PT Home Credit Indonesia Surabaya branch, Validity test, reliability test, multiple linear regression statistical test, F test, and t test are used in this influence research, a non- experimental quantitative research method. The results found that credit sales (Y) were influenced by selling price (X1) and credit terms (X2), and both variables were influenced by credit sales (Y) if tested simultaneously.

A Weak MLMC Scheme for Lévy-Copula-Driven SDEs with Applications to the Pricing of Credit, Equity and Interest Rate Derivatives

This paper develops a novel weak multilevel Monte-Carlo (MLMC) approximation scheme for Lévy-driven Stochastic Differential Equations (SDEs). The scheme is based on the state space discretization (via a continuous-time Markov chain approximation [Mijatović, Aleksandar, Matija Vidmar, and Saul Jacka. 2012. “Markov Chain Approximations for Transition Densities of Lévy Processes.” Electronic Journal of Probability 19]) of the pure-jump component of the driving Lévy process and is particularly suited if the multidimensional driver is given by a Lévy copula. The multilevel version of the algorithm requires a new coupling of the approximate Lévy drivers in the consecutive levels of the scheme, which is defined via a coupling of the corresponding Poisson point processes. The multilevel scheme is weak in the sense that the bound on the level variances is based on the coupling alone without requiring strong convergence. Moreover, the coupling is natural for the proposed discretization of jumps and is easy to simulate. The approximation scheme and its multilevel analogous are applied to examples taken from mathematical finance, including the pricing of credit, equity and interest rate derivatives.

Demand for low-quality offsets by major companies undermines climate integrity of the voluntary carbon market

Most companies include carbon offsets in their net-zero strategy. However, many offset projects are poor quality and fail to reduce emissions as claimed. Here we focus on the twenty companies retiring the most offsets from the voluntary carbon market over 2020–2023. We examine if their offsets could be considered high quality and likely to benefit the climate. We curate an original company-level dataset to examine quality and climate benefits across four dimensions: (1) use of offsets from low/high-risk project types; (2) age of projects and credits; (3) price of credits; and (4) country of implementation. We find that companies have predominantly sourced low-quality, cheap offsets: 87% carry a high risk of not providing real and additional emissions reductions, with most offsets originating from forest conservation and renewable energy projects. Further, most offsets do not meet industry standards regarding age and country of implementation. These findings provide further evidence that the voluntary carbon market is not supporting effective climate mitigation. Particularly, we show that its persisting quality issues are exacerbated by the demand for low-quality offsets by individual companies.

Optimal Production Strategies with Credit Sharing for Automakers under the Dual-Credit Policy

This paper investigates strategic production selections in scenarios of credit sharing between cooperative fuel vehicle (FV) automakers and new energy vehicle (NEV) automakers under the dual-credit policy. Three coopetition production strategies are formulated: the simultaneous production strategy, the FV priority production strategy, and the NEV priority production strategy. On the basis of these three production strategies, this study examines the optimal strategy for both parties in scenarios of no credit sharing, credit sharing dominated by the FV automaker, and credit sharing dominated by the NEV automaker. The simultaneous production strategy is the most conducive to both parties’ coexistence in the vehicle market, and the FV or NEV priority production strategy can be adopted to realize the Pareto optimization of their total profit in certain applicable intervals. Credit sharing will greatly change both parties’ applicable intervals and optimal strategy selections, and credit sharing dominated by FV automakers has been proven to effectively improve their social welfare with a low credit price. Interestingly, a high credit price is sometimes more important for the development of NEVs than the NEV cruising range and substitutability under the dual-credit policy. This study also demonstrates the impact of the credit coefficient, credit equilibrium, and NEV substitutability on both parties’ production decisions and credit sharing. Our study has important managerial implications and can be utilized as strategic guidance for FV/NEV automakers to pursue coopetition under the dual-credit policy.

Tradable mobility credits for long-distance travel in Europe

There is an urgent need to devise policy instruments that will reduce GHG emissions to a sufficient extent in order to achieve the climate targets. Approximately 16% of all greenhouse gas emissions are generated by long-distance travel. Our objective is to estimate the impact of a Tradeable Mobility Credit (TMC) scheme − where the total emissions are fixed by design whereas the price is the outcome of travelers’ choices − will have on modal split and trip cancellation for long-distance leisure travel in Europe. To this end, we develop a market equilibrium model which accounts for travel and trading decisions. For our case study consisting of a travel demand of more than 300 million trips performed annually between 3,000 city-pair connections, the credit price that emerges in the market equilibrium state is 272€ per ton of CO2 under an emission reduction target of 30%. Due to the TMC, overall long-distance leisure travel demand is reduced by 20% and the share of air among the remaining trips decreases from 50 to 42% whereas the market share of rail increases from 23 to 26%. Modal shifts and trip cancellation rates vary greatly amongst OD-pair connections, depending on the local value-of-time and the extent of modal competition for the respective connection. Our findings contribute to the on-going debate surrounding instruments for stimulating sustainable (im)mobility, in particular in the context of the long-distance travel market.

Forest carbon trade in Malaysia: Early assessment of awareness, knowledge, and constraints among forest owners

Forest carbon credit project developments throughout the world can contribute to nature-based solutions to mitigate climate change. With Malaysia’s large forest endowment, a study was conducted to evaluate the awareness and knowledge among forest owners, and to identify the main constraints faced when venturing into forest carbon credit projects. A total of 75 companies in both forest plantations and natural forests were involved in the study. The results clearly suggest that knowledge and awareness of forest carbon credit projects is relatively low among forest owners. Hence, forest carbon credit projects development in the country is relatively slow and only a few projects have had serious development to the auction phase. The slow uptake of carbon projects is plagued by the low carbon credit price, lack of clarity in the national carbon policy, limited expertise and capability for project development, and the lack of financing mechanisms for project development. Forest owners prefer biomass production and timber production due to the higher economic returns. Against this background, policymakers as well as federal-state initiatives need to address the gaps with the forest carbon credit project development ecosystem, in order to facilitate and realize the full carbon sequestration potential of the country.

Free Riding of Vehicle Companies under Dual-Credit Policy: An Agent-Based System Dynamics Model

The dual-credit policy promotes green transition in automobile companies. This paper investigates the dual-credit policy framework in the Chinese automotive industry, with a focus on the phenomenon of free riding. This occurs when traditional vehicle manufacturers within an alliance benefit from the excess credits generated by a transitioning vehicle company without fully committing to their own green transitioning. The focus of this study lies on an alliance constituted by a transitioning vehicle company in partnership with two traditional vehicle manufacturers, all interconnected via equity ties. Utilizing an agent-based system dynamics model, this study explores the strategic behaviors emerging from such credit collaborations and their consequent effects on operational efficiency and financial performance. The findings reveal that 1. free riding negatively impacts the transitioning company’s revenue but benefits the alliance by easing transition pressures and boosting collective performance; 2. stricter policies increase intra-alliance credit transfers and performance, while lower credit prices reduce transfer value and harm the transitioning company’s earnings. This study implies that transitioning vehicle companies with equity-linked partners can benefit from a nuanced understanding of how policy mechanisms interact with alliance dynamics under free riding. By adjusting credit transfer strategies in line with market conditions and policy trends, they can better navigate the dual-credit policy landscape, balancing individual profitability with the needs of the broader alliance and long-term sustainability goals.

Minimum Carbon Credit Cost Estimation for Carbon Geological Storage in the Mae Moh Basin, Thailand

Carbon geological storage (CGS) is one of the key processes in carbon capture and storage (CCS) technologies, which are used to reduce CO2 emissions and achieve carbon-neutrality and net-zero emissions in developing countries. In Thailand, the Mae Moh basin is a potential site for implementing CGS due to the presence of a structural trap that can seal the CO2 storage formation. However, the cost of CGS projects needs to be subsidized by selling carbon credits in order to reach the project breakeven. Therefore, this paper estimates the economic components of a CGS project in the Mae Moh basin by designing the well completion and operating parameters for CO2 injection. The capital costs and operating costs of the process components were calculated, and the minimum carbon credit cost required to cover the total costs of the CGS project was determined. The results indicate that the designed system proposes an operating gas injection rate of 1.454 MMscf/day, which is equivalent to 29,530 tCO2e per year per well. Additionally, the minimum carbon credit cost was estimated to be USD 70.77 per tCO2e in order to achieve breakeven for the best case CGS project, which was found to be much higher than the current market price of carbon credit in Thailand, at around USD 3.5 per tCO2e. To enhance the economic prospects of this area, it is imperative to promote a policy of improving the cost of carbon credit for CGS projects in Thailand.

Assessing preferences for forest carbon credit and co-benefits: A choice experiment case study in Japan

This study investigated corporate preferences for forest carbon credit offsets. The preferences were elicited through a choice experiment by administering a questionnaire to determine the price of credit, location of forest sequestration project offset, social development on local employment, preservation of ecosystem services, and unit of sustainable development goals (SDGs). We also examined stated preferences for credit offset and the willingness to pay. The analysis employed multinomial logit and random parameter logit (RPL) models to account for heterogeneity in preferences. The results showed that small and medium-sized enterprises (SMEs) held a neutral stance regarding offsetting their emissions and were categorized as being in the early stages of engagement with carbon offsetting. As SMEs can decide whether to purchase credit, we assessed their preferences for the type of credit-based forest carbon sequestration. SMEs had a significant preference for the location of the project, SDGs, and credit price when deciding to purchase credit based on the RPL model estimates. They were willing to pay JPY 6,191 (approximately USD 41) for the location of a project to be local rather than overseas, JPY 933 for a higher number of unit SDGs, and JPY 131 for an increase in the number of jobs. These results suggest that SMEs prefer purchasing local credit generated within their prefecture as a carbon offset alternative.

Intermediary Capital and the Credit Market

We propose a tractable framework to examine the role of intermediary capital in the allocation and pricing of credit. In our model, regulated financial intermediaries compete with unregulated investors, targeting distributions of heterogeneous borrowers. We derive a sufficient statistic that characterizes intermediaries’ cross-sectional lending decisions and provide a novel intermediary asset pricing equation that accounts for the endogenous segmentation of marginal investors across securities. These formulae reveal the central role of intermediaries’ shadow cost of capital in both credit allocation and pricing. Our results can concurrently rationalize a broad array of empirical facts documented in the context of credit markets. This paper was accepted by Tomasz Piskorski, finance. Funding: This work was supported by Marcus och Amalia Wallenbergs minnesfond [Grant 2021.0122].

Assessing the economic feasibility of voluntary carbon markets in land use management scenarios for Scottish saltmarshes

Saltmarshes have been valued for their multiple ecosystem services, including agriculture, recreation, habitats for fish and birds, coastal protection and carbon sequestration and long-term storage. However, because of the many threats faced, including rising sea levels, limited sediment supplies and anthropogenic impacts, saltmarshes require careful restoration and protection management to continue providing these benefits. In this study, we examined the feasibility of land abandonment caused by reinstated tidal flow in Scottish saltmarshes, based on the differential gains in soil carbon stock between natural saltmarshes and those manged for agricultural uses, and suggested considerations for a voluntary carbon market plan. The study's results showed that the proportion of Scottish saltmarshes used for agricultural activities was not very large (2.56 %, equivalent to 179.73 ha). The average net benefit (i.e., after removing the opportunity cost of land) of the new land use is GBP £ 5368.71/ha after a 67-year post-abandonment management program, showing that this model is economically viable to implement a carbon market mechanism. A voluntary carbon market scheme may be easier to implement than a compliance scheme, although the price of carbon credits under the voluntary carbon market is not high to fully compensate for the opportunity costs of land in all the Scottish regions. In effect, the carbon price at the break-even point (e.g., that balances the opportunity cost of land) in the Scottish regions varied widely (range £ 1.06–59.83/tC), which means that for regions with higher opportunity costs there is a need to consider compensating farmers through a blended private-public mechanism. Despite these difficulties, implementing saltmarshes management models for carbon market initiatives can benefit society in a broader sense, not just mitigate climate change.

New energy vehicles' technology innovation coordination strategy based on alliance negotiation under dual credit policy.

The development of new energy vehicles (NEVs) is one of the effective ways to alleviate carbon emissions, environmental pollution, and energy scarcity in the transportation sector. The Chinese government has innovatively proposed the "dual credit policy," but it is still a hot topic whether it can promote the NEVs' technological innovation. In this study, we construct game models and obtain the technological innovation strategies for NEVs under the dual credit policy, considering that the NEV supply chain contains one manufacturer and N suppliers. Further, we construct bargaining game models and study how to encourage manufacturers and suppliers to enhance technological innovation, realize supply chain coordination, and give the alliance strategy to maximize suppliers' profit. We found that the dual credit policy can effectively stimulate technological innovation, and the higher the credit price or technological innovation credit factor, the higher the technical level of NEVs. The findings could guide the government to adjust and revise the policy. Second, we found that the bargaining games could coordinate the NEV supply chain so that decentralized enterprises can achieve optimal technological innovation under centralized decision-making. Third, we found that suppliers can improve their profits by choosing a suitable alliance strategy under the manufacturer's different negotiating power.

The impact of consumer preferences on the evolution of competition in China's automobile market under the Dual Credit Policy-A density game based perspective.

The evolution of the automobile market is a macro-expression of the behavior of automakers' production decisions. This study examines the competitive environment between new energy vehicles (NEVs) and conventional fuel vehicles (CFVs) and develops a game-theoretical model incorporating consumer utility, automaker profit, and the competitive density of NEVs and CFVs. It aims to assess how consumers' preferences for vehicle range and smart features influence automakers' strategic decisions and the broader market evolution under the Dual Credit Policy. The findings indicate: (1) A low NEV credit price facilitates NEV market size growth, but this growth rate diminishes beyond a certain price threshold; (2) The lower the consumer's range preference, the higher NEV credit price can accelerate the development of new energy vehicles to their saturation value. However, when consumers in the market prioritize smart features, increasing the NEV credit price does not significantly influence the growth of NEV market size. (3) Higher consumer preferences for both range and smart features, combined with increased NEV credit prices, can synergistically accelerate the speed of the NEV market to reach the saturation value and also raise the saturation value of the scale of NEVs. And higher consumer range preference combined with increased NEV credit prices has a more significant effect on the promotion of NEV market size than the combined effect of higher consumer smart preference and increased NEV credit prices. The actual data of China's automobile market is used in the simulation of this model. The model and its simulation results effectively explain and reveal the evolutionary impacts of consumers' range and smart feature preference on the promotion of China's NEVs under the Dual Credit Policy to provide effective technological and theoretical support for the promotion of the sustainable development of China's NEV industry.

Economic And Asymmetric Information As Moderation Variables, Credit Risk And Credit Prices

Profitability denotes a company's capacity to generate earnings within a specified timeframe. Companies that thrive and exhibit profitability are perceived as successful and typically garner favour among shareholders. This study examines profitability in the context of a company's ability to generate earnings within a specified timeframe, which is crucial for shareholder favour and business success. It focuses on the banking sector in Indonesia, encompassing 33 listed entities, with eight selected for the research sample. Employing hypothesis testing and analytical techniques, the study finds that asymmetric information and fluctuations in profitability do not affect credit pricing. Instead, credit risk positively impacts credit pricing, along with positive contributions from asymmetric information and profitability. This suggests that profitability does not hinder creditworthiness improvements. Asymmetric information does not affect credit pricing, making selling bank loans risky. Further research on credit pricing at a larger scale is warranted.

국제 자발적 탄소시장 크레딧 가격 결정요인분석

This study analyzes the correlation between voluntary carbon market credit prices and three key sets of variables. Prior research on compliance carbon markets has identified these factors as a significant influence on emission price factors. This study employs the Autoregressive Distributed Lag (ARDL) model to test these relationships and empirically examines short and long term correlations by conducting cointegration tests between each variable and the emission credit price. The results of the study are as follows:First, electricity prices exhibit a positive relationship with credit prices in the short term but a negative relationship in the long term. Second, compared to regulatory carbon market prices, credit prices are influenced by temperature variables, reflecting local weather conditions. Third, the energy variable emerges as the most crucial factor impacting prices in both compliance emissions trading systems and voluntary carbon credits. This implies that companies aiming for carbon neutrality through voluntary carbon market credits must develop comprehensive strategies that consider various external circumstances.

The importance of accounting method and sampling depth to estimate changes in soil carbon stocks

BackgroundAs interest in the voluntary soil carbon market surges, carbon registries have been developing new soil carbon measurement, reporting, and verification (MRV) protocols. These protocols are inconsistent in their approaches to measuring soil organic carbon (SOC). Two areas of concern include the type of SOC stock accounting method (fixed-depth (FD) vs. equivalent soil mass (ESM)) and sampling depth requirement. Despite evidence that fixed-depth measurements can result in error because of changes in soil bulk density and that sampling to 30 cm neglects a significant portion of the soil profile’s SOC stock, most MRV protocols do not specify which sampling method to use and only require sampling to 30 cm. Using data from UC Davis’s Century Experiment (“Century”) and UW Madison’s Wisconsin Integrated Cropping Systems Trial (WICST), we quantify differences in SOC stock changes estimated by FD and ESM over 20 years, investigate how sampling at-depth (> 30 cm) affects SOC stock change estimates, and estimate how crediting outcomes taking an empirical sampling-only crediting approach differ when stocks are calculated using ESM or FD at different depths.ResultsWe find that FD and ESM estimates of stock change can differ by over 100 percent and that, as expected, much of this difference is associated with changes in bulk density in surface soils (e.g., r = 0.90 for Century maize treatments). This led to substantial differences in crediting outcomes between ESM and FD-based stocks, although many treatments did not receive credits due to declines in SOC stocks over time. While increased variability of soils at depth makes it challenging to accurately quantify stocks across the profile, sampling to 60 cm can capture changes in bulk density, potential SOC redistribution, and a larger proportion of the overall SOC stock.ConclusionsESM accounting and sampling to 60 cm (using multiple depth increments) should be considered best practice when quantifying change in SOC stocks in annual, row crop agroecosystems. For carbon markets, the cost of achieving an accurate estimate of SOC stocks that reflect management impacts on soils at-depth should be reflected in the price of carbon credits.

Comparison of major carbon offset standards for soil carbon projects in Australian grazing lands

Despite the potential role of soil carbon offset schemes to reduce greenhouse gas emissions, there are concerns that the rules for assessment, monitoring, and operation are barriers to engagement. This may explain why there is low participation of Australian landholders in soil carbon projects. This study reviews the literature on three leading voluntary carbon standards and methods to assess their suitability for developing soil carbon projects in grazing systems in Australia. The soil carbon method of each standard was analysed based on several criteria: scope, eligibility/applicability, newness and additionality, permanency, baselines and quantification methodology, environmental sustainability, safeguard mechanism, and crediting period. A hypothetical grazing case study in Central Queensland, Australia’s premier beef cattle region, was used to model the cost-effectiveness and potential returns from establishing soil carbon projects under the three standards. Results show that credits created under the Emissions Reduction Fund in Australia generate higher returns for soil carbon projects compared to the Verified Carbon Standard and Gold Standard. This is largely due to a higher market price for soil carbon credits in the Emissions Reduction Fund, reflecting more robust standards of assessment and verification. While assessment costs for credits were higher in the international schemes, returns were lower because prices reflected less rigorous standards.

Stackelberg-Nash asymmetric bargaining-based scheduling optimization and revenue-allocation for multi-operator regional integrated energy system considering competition-cooperation relationship and source-load uncertainties

The integration of source-grid-load-storage greatly improves the energy managing flexibility of regional integrated energy systems (RIES). Considering the conflicting interests of multi-operator, this paper divides RIES into 1) energy supply center (ESC); 2) load aggregator (LA); 3) energy storage aggregator (ESA), and establishes a multi-operator two-layer optimal scheduling model by combining 1) the Stackelbelberg-Nash asymmetric bargaining game based on the genetic algorithm; and 2) the alternating direction method of multipliers algorithm (GA-ADMM). Firstly, considering the absence of historical data, trapezoidal fuzzy parameters are introduced to construct fuzzy chance constraints based on credibility theory to simulate the source-load uncertainties. Secondly, the uncertainty of demand response behavior, real-time carbon credits trading within RIES, and cooperation-competition behavior of followers (LA and ESA) are considered to simulate the asymmetric relationship between followers and leaders (ESC) based on GA. Then, based on the ADMM algorithm, a Nash asymmetric bargaining game considering energy dependency and energy supply-reception status is proposed to realize the revenue allocation between followers. Finally, simulations are implemented to verify the validity and reliability of the proposed model. Results show that: 1) Cooperation improves the energy-managing flexibility of followers, reduces their dependence on ESC, and thus enhances their game ability. 2) The real-time carbon credits trading enables zero-carbon energy interactions and natural gas replenishment within RIES. 3) Increases in the price of various energy and carbon credits can enhance cooperation between followers.