This paper develops a simple model to evaluate the value and the activation frequencies of a generation system consisting of coal-fired and a gas-fired power plants using a real options approach, and the notions of clean-spark and clean-dark spreads. Under a cap-and-trade scheme, the use of...

This textbook provides an introduction to environmental finance and investments. The current situation raises fundamental questions that this book aims to address. Under which conditions could carbon pricing schemes contribute to a significant decrease in emissions? What are the new investment...

1 Introduction -- 2 The Issue of Climate Change.- 3 The Rise of the Emission Markets -- 4 The Economics of Mitigation Strategies -- 5 The Finance of Environment Investments -- 6 The Emission Price Dynamics -- Bibliography