Research On The Decision Methods Of Wastewater Treatment Investment Based On Real Options

With the rapid development of economic and social, the quality of human life isquickly improved. Followed by, it is very serious damage to the resources and theenvironment, especially water. Therefore, the gradual improvements of deterioratingwater environment, to increase the construction of water pollution control projects,and more and more countries and the Government’s attention. With the launch of thewater pollution control and governance of major science and technology, China’swater pollution control work has entered a new stage. At present, China’s waterpollution control funds from the Government’s financial investment, the operatingmode of the water pollution control projects, BOT and TOT two modes. In order topromote the development of water pollution control market, the state activelypromote the diversification of investment in water pollution control projects andvigorously promote the development of operating mode of diversification. In thistrend, the water pollution control investment decisions in this field one of theproblems to be solved.In this paper, the development of the area of investment in China’s waterpollution control and its influence factors on the basis of in-depth analysis, realoptions theory and methods to establish the model of the water pollution controlinvestment decisions Growth Option. First, the characteristics of BOT projects ofpollution control options. BOT projects based on water pollution control, in turnmodel is further divided into single growth option model, the growth of thesequence type option model in two forms, the setting of model parameters isanalyzed in detail. Investment decision model constructed on the proposedconstruction of a city sewage treatment project evaluation and analysis, combinedwith the net present value method were compared; the results show the superiorityof the model in the field of water pollution control investment decisions. At thesame time, there is a sensitivity analysis on the parameters in the model. Amongthem, the return volatility, risk-free rate of return and other two variables, the mostsensitive. This study to some extent, improve and complement the development ofrelated fields, the more important theoretical and practical significance.