EURO 2024 Copenhagen
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538. Analysing the optimal time of purchase in case of increasing carbon dioxide prices

Invited abstract in session WC-59: OR in Accounting: Performance and ESG, stream OR in Financial and Management Accounting.

Wednesday, 12:30-14:00
Room: S08 (building: 101)

Authors (first author is the speaker)

1. Anna Uhrmeister
Accounting, University of Bielefeld

Abstract

The awareness of climate change and the corresponding need for climate protection have become omnipresent for companies nowadays. In 2005, the European Commission established the European Union Emissions Trading Scheme (EU ETS), in order to mitigate the effects of anthropogenic climate change and render them more predictable. From 2027, as a result of the so-called Green Deal, companies will no longer receive subsidies and will responsible for paying the full costs of greenhouse gas emissions. The ramifications for companies are still uncertain.
Starting from this, the aim of the research endeavors to delve deeper into the examination of the impact of greenhouse gas emission costs on German companies. It is assumed that the effects will be most significant in carbon intensive productions. Taking this into consideration, this research will model and analyse an average company in the steel industry.
Along with the implementation of the EU ETS, companies are faced with the challenge of making decisions on the purchase of European Emission Allowances (EUA’s) or the investment in lower- emission technology. The study aims to provide an overview of the range of strategies a company is faced with. Subsequently, a selection of possible scenarios are analysed e.g. the optimum time of purchase, considering capital commitment costs. Furthermore, the uncertainty caused by fluctuations in EUA‘s and fluctuating raw material prices are considered.

Keywords

Status: accepted

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