Valuing a Natura 2000 network site to inform land use options using a discrete choice experiment: An illustration from the Basque Country

One of the main problems that public institutions face in the management of protected areas, such as the European Natura 2000 network, is determining how to design and implement sustainable management plans that account for the wide range of marketed and non-marketed benefits they provide to society. This paper presents an application of a stated preference valuation approach aimed at evaluating the social preferences of the population of the Basque Country, Spain, for the key attributes of a regional Natura 2000 network site. According to our results, individuals’ willingness-to-pay (WTP) is higher for attributes associated with non-use values (native tree species and biodiversity conservation) than for attributes associated with use values (agricultural development and commercial forestry). The paper concludes that management policies related to Natura 2000 network sites should account for both for the importance of non-use values and the heterogeneity of the population's preferences in order to minimize potential land use conflicts.

Valuation of wind energy projects: A real options approach

27 p.

A dynamic CGE modelling approach for analyzing trade-offs in climate change policy options: the case of Green Climate Fund

38 p.

Valuation of Wind Energy Projects: A Real Options Approach

We address the valuation of an operating wind farm and the finite-lived option to invest in it under different reward/support schemes: a constant feed-in tariff, a premium on top of the electricity market price (either a fixed premium or a variable subsidy such as a renewable obligation certificate or ROC), and a transitory subsidy, among others. Futures contracts on electricity with ever longer maturities enable market-based valuations to be undertaken. The model considers up to three sources of uncertainty: the electricity price, the level of wind generation, and the certificate (ROC) price where appropriate. When analytical solutions are lacking, we resort to a trinomial lattice combined with Monte Carlo simulation; we also use a two-dimensional binomial lattice when uncertainty in the ROC price is considered. Our data set refers to the UK. The numerical results show the impact of several factors involved in the decision to invest: the subsidy per MWh generated, the initial lump-sum subsidy, the maturity of the investment option, and electricity price volatility. Different combinations of variables can help bring forward investments in wind generation. One-off policies, e.g., a transitory initial subsidy, seem to have a stronger effect than a fixed premium per MWh produced.