Research On Investment Decision Making Of Carbon Intensity Enterprise Under The Fluctuation Of Carbon Trading Price

Since the Industrial Revolution took place,the burning of large amounts of fossil fuels has led to the greenhouse effect,which has also brought about global climate problems such as warming,sea levels rising and frequent catastrophic weather.Alleviating climate warming and reducing carbon emissions has become one of the most important global issues for mankind in the 21st century.Nowadays,China has become the largest developing country and the most carbon-emitting country in the world.The political and economic pressure from the international community,the sense of responsibility as a big country,and the severe energy and environmental situation in China determine the necessity and urgency of reducing carbon emissions and achieving low-carbon development in China.Currently,carbon trading mechanism is one of the most effective measures to reduce emissions,and at present,China has some successful pilots for carbon trading operation,which have accumulated rich experience and played a role in emission reduction.The national carbon market is also actively preparing for the upcoming completion.Carbon trading mechanism is a total emission reduction mechanism,whose main objects of regulation are high-carbon enterprises,through taking the high-carbon enterprises into the trading system and imposing a certain amount of carbon costs to achieve emission reduction.From the perspective of business investment,this article focuses on the impact of carbon price fluctuations on the high-carbon projects investment and on the business investment options under the carbon trading mechanism.Reviewing domestic and foreign related researches,when referring to the investment behavior of enterprises under carbon emission reduction and carbon trading,previous researches focused on the investment value of new energy projects,R&D investment and low-carbon supply chains.Meanwhile,many scholars focused on the value of a single energy-saving and emission-reduction investment behavior taken by the enterprise or the interaction between the enterprise and the policy after carbon regulation.The research methods mainly include the input-output model,the optimization model,the real option,the game theory and the option game.Little literature takes the main regulatory body of the carbon trading system,namely high-carbon enterprises,as the research object.This paper combines the carbon trading mechanism,the price volatility with the investment value of high-carbon enterprises and the choices of enterprises'emission reduction measures to construct the real option model of the average regression in order to study the investment value of high carbon projects and the choices of emission reduction measures under the fluctuations of carbon trading prices.Based on the logics framework which asking,analyzing and solving problems,the full text is divided into seven chapters,which can be summarized into the following five parts:The first part is the introduction.This part mainly expounds the research background and research significance,clarifies the research content and shows the research framework of this paper.The second part is the basic research.Including Chapter 2 and Chapter 3,this part is mainly theoretical basis and literature review.The basic theories and research methods related to the research topics in this article are briefly described and the current researches status at home and abroad on the related topics and methods are summarized.This part includes the uncertainty and investment,the traditional investment decision-making methods and real options pricing.The third part is mainly about the carbon trading mechanism and the status quo of China's carbon market,and analyzes the formation,influencing factors and volatility characteristics of carbon trading prices.The results show that although there are differences in the total quota,distribution,trading mechanism and accounting methods in the seven pilot markets in China,the fluctuation of the carbon prices generally shows some consistent characteristics,such as that the carbon price is mainly determined by the policies and quotas,however,due to the impact of the macroeconomy,industry boom and energy prices,there will be structural changes in the price of carbon before and after the compliance date and the price of carbon trading meets the stochastic volatility of the average return in theory.The fourth part is empirical research(Chapter 5 and Chapter 6).The idea of this part is to establish a model-case simulation.Through establishing a model based on the average regression for the selection of emission reduction measures and the evaluation of the investment value of high-carbon projects,this section partially simulates the investment strategy of enterprises in the carbon market.Taking the typical high-carbon coal liquefaction oil project as an example,this part uses the above model to simulate,which makes the research results more convincing and practical.The fifth part is the conclusions,the limitations and the prospects of the research(Chapter 7).This part analyzes and discusses the research findings and the limitations of the research and the prospect of future research.Through theoretical analysis and empirical test,this paper draws four conclusions as following:Firstly,under the carbon trading mechanism,the volatility of carbon prices has brought huge risks and uncertainties to corporate investments.However,at the same time,this uncertainty brings flexibility to the company's investments in emission reduction as well.Research shows that the total quota set by the government,the free quota ratio and the carbon price determine whether an enterprise invests in carbon emission reduction projects.In the case of a certain quota,we abstract the corporate strategy to two types:buying quotas at the transaction price and one-off investment to reduce emissions,and we can find the carbon threshold of the two strategy conversions.Companies choose to buy quotas directly below that threshold,above which a one-time investment is required to reduce their emissions.Secondly,we discuss the effect of different regression rates,means and volatility on the value of option F(V)in the real options model based on the average regression for carbon prices.The results show that the smaller the regression rate,the greater the mean,the greater the option value and the higher the carbon threshold will be.And we also find that the higher the volatility,the higher the value of the option.Thirdly,we set up a model for the value of high-carbon projects under carbon price volatility.In this model,we mainly discuss the impact of carbon price volatility on the investment value of high-carbon projects.In particular,we find the carbon price threshold for expanding NPV.The significance of this carbon threshold is that if the carbon prices are above this threshold,the value of the project is negative,losing the meaning of investment,while carbon prices above this threshold may trigger the investment.The model can also discuss the initial investment of the project.At a given carbon price,the large initial investment has a relatively low carbon threshold.Under carbon regulation,large-scale enterprises are more likely to choose to invest while smaller ones are more likely to wait.This conclusion shows that it may lead to industry gathering.Finally,let's combine the two models together.At a certain carbon quota,when the carbon price is higher than a certain value P₁,it will trigger the enterprises to make investment in reducing emissions,but when the carbon price becomes more higher,the investment value above P₂ will loss its value.This conclusion is very inspiring for the government to choose a specific carbon trading strategy.If the quota supply is too loose and the carbon price is too low,enterprises will directly purchase quotas and lose the incentive to reduce their carbon emissions so that the carbon trading strategy will lose its basic function of reducing carbon emissions.When the quota supply is too tight and carbon prices will rise,it will decrease the enthusiasm for business investment and production.Our conclusions can be the quantitative basis for the government to make a carbon trading strategy design.