It is common understanding that a reduction of anthropogenic CO2 emissions is undispensible. Furthermore, already emitted CO2 has to be removed from the atmosphere. To meet these objectives, novel processes must be developed and applied. Besides the utilization of renewable energy sources and a...

This paper is concerned with managing risk exposure to temperature using weather derivatives. We consider hedging temperature risk using so-called HDD- and CDD-index futures, which are instruments written on temperatures in specific locations over specific time periods. The temperatures are...

This paper presents valuation models of emission allowance options under an emission trading scheme, operating in an open trading phase, where unused allowances are banked to subsequent phases without any limit. Empirical studies are carried out to show that allowance option prices exhibit...