The financial and environmental performance of firms exposed to the EU Emissions Trading Scheme

This thesis is an empirical-based study of the European Union’s Emissions Trading Scheme (EU ETS) and its implications in terms of corporate environmental and financial performance. The novelty of this study includes the extended scope of the data coverage, as most previous studies have examined only the power sector. The use of verified emissions data of ETS-regulated firms as the environmental compliance measure and as the potential differentiating criteria that concern the valuation of EU ETS-exposed firms in the stock market is also an original aspect of this study. The study begins in Chapter 2 by introducing the background information on the emission trading system (ETS), which focuses on (i) the adoption of ETS as an environmental management instrument and (ii) the adoption of ETS by the European Union as one of its central climate policies. Chapter 3 surveys four databases that provide carbon emissions data in order to determine the most suitable source of the data to be used in the later empirical chapters. The first empirical chapter, which is also Chapter 4 of this thesis, investigates the determinants of the emissions compliance performance of the EU ETS-exposed firms through constructing the best possible performance ratio from verified emissions data and self-configuring models for a panel regression analysis. Chapter 5 examines the impacts on the EU ETS-exposed firms in terms of their equity valuation with customised portfolios and multi-factor market models. The research design takes into account the emissions allowance (EUA) price as an additional factor, as it has the most direct association with the EU ETS to control for the exposure. The final empirical Chapter 6 takes the investigation one step further, by specifically testing the degree of ETS exposure facing different sectors with sector-based portfolios and an extended multi-factor market model. The findings from the emissions performance ratio analysis show that the business model of firms significantly influences emissions compliance, as the capital intensity has a positive association with the increasing emissions-to-emissions cap ratio. Furthermore, different sectors show different degrees of sensitivity towards the determining factors. The production factor influences the performance ratio of the Utilities sector, but not the Energy or Materials sectors. The results show that the capital intensity has a more profound influence on the utilities sector than on the materials sector. With regard to the financial performance impact, ETS-exposed firms as aggregate portfolios experienced a substantial underperformance during the 2001–2004 period, but not in the operating period of 2005–2011. The results of the sector-based portfolios show again the differentiating effect of the EU ETS on sectors, as one sector is priced indifferently against its benchmark, three sectors see a constant underperformance, and three sectors have altered outcomes.

Does stakeholder pressure influence corporate GHG emissions reporting? Empirical evidence from Europe

Purpose – The purpose of this paper is to seek to shed light on the practice of incomplete corporate disclosure of quantitative Greenhouse gas (GHG) emissions and investigates whether external stakeholder pressure influences the existence, and separately, the completeness of voluntary GHG emissions disclosures by 431 European companies. Design/methodology/approach – A classification of reporting completeness is developed with respect to the scope, type and reporting boundary of GHG emissions based on the guidelines of the GHG Protocol, Global Reporting Initiative and the Carbon Disclosure Project. Logistic regression analysis is applied to examine whether proxies for exposure to climate change concerns from different stakeholder groups influence the existence and/or completeness of quantitative GHG emissions disclosure. Findings – From 2005 to 2009, on average only 15 percent of companies that disclose GHG emissions report them in a manner that the authors consider complete. Results of regression analyses suggest that external stakeholder pressure is a determinant of the existence but not the completeness of emissions disclosure. Findings are consistent with stakeholder theory arguments that companies respond to external stakeholder pressure to report GHG emissions, but also with legitimacy theory claims that firms can use carbon disclosure, in this case the incomplete reporting of emissions, as a symbolic act to address legitimacy exposures. Practical implications – Bringing corporate GHG emissions disclosure in line with recommended guidelines will require either more direct stakeholder pressure or, perhaps, a mandated disclosure regime. In the meantime, users of the data will need to carefully consider the relevance of the reported data and develop the necessary competencies to detect and control for its incompleteness. A more troubling concern is that stakeholders may instead grow to accept less than complete disclosure. Originality/value – The paper represents the first large-scale empirical study into the completeness of companies’ disclosure of quantitative GHG emissions and is the first to analyze these disclosures in the context of stakeholder pressure and its relation to legitimation.

Selective environmental stress caused by magmatic sulfur emissions from continental flood basalt eruptions

Several biotic crises during the past 300 million years have been linked to episodes of continental flood basalt volcanism, and in particular to the release of massive quantities of magmatic sulphur gas species. Flood basalt provinces were typically formed by numerous individual eruptions, each lasting years to decades. However, the environmental impact of these eruptions may have been limited by the occurrence of quiescent periods that lasted hundreds to thousands of years. Here we use a global aerosol model to quantify the sulphur-induced environmental effects of individual, decade-long flood basalt eruptions representative of the Columbia River Basalt Group, 16.5–14.5 million years ago, and the Deccan Traps, 65 million years ago. For a decade-long eruption of Deccan scale, we calculate a decadal-mean reduction in global surface temperature of 4.5 K, which would recover within 50 years after an eruption ceased unless climate feedbacks were very different in deep-time climates. Acid mists and fogs could have caused immediate damage to vegetation in some regions, but acid-sensitive land and marine ecosystems were well-buffered against volcanic sulphur deposition effects even during century-long eruptions. We conclude that magmatic sulphur from flood basalt eruptions would have caused a biotic crisis only if eruption frequencies and lava discharge rates had been high and sustained for several centuries at a time.

Vehicular particulate matter emissions in road tunnels in Sao Paulo, Brazil

In the metropolitan area of Sao Paulo, Brazil, ozone and particulate matter ( PM) are the air pollutants that pose the greatest threat to air quality, since the PM and the ozone precursors ( nitrogen oxides and volatile organic compounds) are the main source of air pollution from vehicular emissions. Vehicular emissions can be measured inside road tunnels, and those measurements can provide information about emission factors of in-use vehicles. Emission factors are used to estimate vehicular emissions and are described as the amount of species emitted per vehicle distance driven or per volume of fuel consumed. This study presents emission factor data for fine particles, coarse particles, inhalable particulate matter and black carbon, as well as size distribution data for inhalable particulate matter, as measured in March and May of 2004, respectively, in the Janio Quadros and Maria Maluf road tunnels, both located in Sao Paulo. The Janio Quadros tunnel carries mainly light-duty vehicles, whereas the Maria Maluf tunnel carries light-duty and heavy-duty vehicles. In the Janio Quadros tunnel, the estimated light-duty vehicle emission factors for the trace elements copper and bromine were 261 and 220 mu g km(-1), respectively, and 16, 197, 127 and 92 mg km(-1), respectively, for black carbon, inhalable particulate matter, coarse particles and fine particles. The mean contribution of heavy-duty vehicles to the emissions of black carbon, inhalable particulate matter, coarse particles and fine particles was, respectively 29, 4, 6 and 6 times higher than that of light-duty vehicles. The inhalable particulate matter emission factor for heavy-duty vehicles was 1.2 times higher than that found during dynamometer testing. In general, the particle emissions in Sao Paulo tunnels are higher than those found in other cities of the world.

Modelling the line variations from the wind-wind shock emissions of WR 30a

The study of Wolf-Rayet stars plays an important role in evolutionary theories of massive stars. Among these objects, similar to 20 per cent are known to be in binary systems and can therefore be used for the mass determination of these stars. Most of these systems are not spatially resolved and spectral lines can be used to constrain the orbital parameters. However, part of the emission may originate in the interaction zone between the stellar winds, modifying the line profiles and thus challenging us to use different models to interpret them. In this work, we analysed the He II lambda 4686 angstrom + C IV lambda 4658 angstrom blended lines of WR 30a (WO4+O5) assuming that part of the emission originate in the wind-wind interaction zone. In fact, this line presents a quiescent base profile, attributed to the WO wind, and a superposed excess, which varies with the orbital phase along the 4.6-d period. Under these assumptions, we were able to fit the excess spectral line profile and central velocity for all phases, except for the longest wavelengths, where a spectral line with constant velocity seems to be present. The fit parameters provide the eccentricity and inclination of the binary orbit, from which it is possible to constrain the stellar masses.

Relative roles of biogenic emissions and Saharan dust as ice nuclei in the Amazon basin

Some aerosol particles, known as ice nuclei, can initiate ice formation in clouds, thereby influencing precipitation, cloud dynamics and the amount of incoming and outgoing solar radiation. In the absence of biomass burning, aerosol mass concentrations in the Amazon basin are low(1). Tropical forests emit primary biological particles directly into the atmosphere; secondary organic aerosols form from the emission and oxidation of biogenic gases(2). In addition, particles derived from biomass burning in central Africa, marine aerosols, and windblown dust from North Africa(3-5) often reach the central part of the Amazon basin during the wet season. The contribution of these aerosol sources to ice nucleation in the region is uncertain. Here we present observations of the concentration and elemental composition of ice nuclei in the Amazon basin during the wet season. Using transmission electron microscopy combined with energy-dispersive X-ray spectroscopy, we show that ice nuclei are primarily composed of carbonaceous material and dust. We show that biological particles dominate the carbonaceous fraction, whereas import of Saharan dust explains the intermittent appearance of dust-containing nuclei. We conclude that ice-nucleus concentration and abundance can be explained almost entirely by local emissions of biological particles supplemented by import of Saharan dust. Using a simple model, we tentatively suggest that the contribution of local biological particles to ice nucleation is increased at higher atmospheric temperatures, whereas the contribution of dust particles is increased at lower temperatures.

Infrared emissions, visible up-conversion, thermoluminescence and defect centres in Er(3)Al(5)O(12) phosphor obtained by solution combustion reaction

The Er(3)Al(5)O(12) phosphor powders were prepared using the solution combustion method. Formation and homogeneity of the Er(3)Al(5)O(12) phosphor powders have been verified by X-ray diffraction and energy-dispersive X-ray analysis respectively. The frequency up-conversion from Er(3)Al(5)O(12) phosphor powder corresponding to the (2)H(9/2) -> (4)I(15/2), (2)H(11/2) -> (4)I(15/2), (4)S(3/2) -> (4)I(15/2), (4)F(9/2) -> (4)I(15/2) and the infrared emission (IR) due to the (4)I(13/2) -> (4)I(15/2) transitions lying at similar to 410, similar to 524, similar to 556, 645-680 nm and at similar to 1.53 mu m respectively upon excitation with a Ti-Sapphire pulsed/CW laser have been reported. The mechanism responsible for the frequency up-conversion and IR emission is discussed in detail. Defect centres induced by radiation were studied using the techniques of thermoluminescence and electron spin resonance. A single glow peak at 430A degrees C is observed and the thermoluminescence results show the presence of a defect center which decays at high temperature. Electron spin resonance studies indicate a center characterized by a g-factor equal to 2.0056 and it is observed that this center is not related to the thermoluminescence peak. A negligibly small concentration of cation and anion vacancies appears to be present in the phosphor in accordance with the earlier theoretical predictions.

The value of a saved tree : The lifecycle of CO2-emissions associated with the combination of printing paper and electricity production of wood in the U.S. and Sweden

The pulp- and paper production is a very energy intensive industry sector. Both Sweden and the U.S. are major pulpandpaper producers. This report examines the energy and the CO2-emission connected with the pulp- and paperindustry for the two countries from a lifecycle perspective.New technologies make it possible to increase the electricity production in the integrated pulp- andpaper mill through black liquor gasification and a combined cycle (BLGCC). That way, the mill canproduce excess electricity, which can be sold and replace electricity produced in power plants. In thisprocess the by-products that are formed at the pulp-making process is used as fuel to produce electricity.In pulp- and paper mills today the technology for generating energy from the by-product in aTomlinson boiler is not as efficient as it could be compared to the BLGCC technology. Scenarios havebeen designed to investigate the results from using the BLGCC technique using a life cycle analysis.Two scenarios are being represented by a 1994 mill in the U.S. and a 1994 mill in Sweden.The scenariosare based on the average energy intensity of pulp- and paper mills as operating in 1994 in the U.S.and Sweden respectively. The two other scenarios are constituted by a »reference mill« in the U.S. andSweden using state-of-the-art technology. We investigate the impact of varying recycling rates and totalenergy use and CO2-emissions from the production of printing and writing paper. To economize withthe wood and that way save trees, we can use the trees that are replaced by recycling in a biomassgasification combined cycle (BIGCC) to produce electricity in a power station. This produces extra electricitywith a lower CO2 intensity than electricity generated by, for example, coal-fired power plants.The lifecycle analysis in this thesis also includes the use of waste treatment in the paper lifecycle. Both Sweden and theU.S. are countries that recycle paper. Still there is a lot of paper waste, this paper is a part of the countries municipalsolid waste (MSW). A lot of the MSW is landfilled, but parts of it are incinerated to extract electricity. The thesis hasdesigned special scenarios for the use of MSW in the lifecycle analysis.This report is studying and comparing two different countries and two different efficiencies on theBLGCC in four different scenarios. This gives a wide survey and points to essential parameters to specificallyreflect on, when making assumptions in a lifecycle analysis. The report shows that there arethree key parameters that have to be carefully considered when making a lifecycle analysis of wood inan energy and CO2-emission perspective in the pulp- and paper mill in the U.S. and in Sweden. First,there is the energy efficiency in the pulp- and paper mill, then the efficiency of the BLGCC and last theCO2 intensity of the electricity displaced by BIGCC or BLGCC generatedelectricity. It also show that with the current technology that we havetoday, it is possible to produce CO2 free paper with a waste paper amountup to 30%. The thesis discusses the system boundaries and the assumptions.Further and more detailed research, including amongst others thesystem boundaries and forestry, is recommended for more specificanswers.

Out-of-town shopping and its induced CO2-emissions

Planning policies in several European countries have aimed at hindering the expansion of out-of-town shopping centers. One argument for this is concern for the increase in transport and a resulting increase in environmental externalities such as CO2-emissions. This concern is weakly founded in science as few studies have attempted to measure CO2-emissions of shopping trips as a function of the location of the shopping centers. In this paper we conduct a counter-factual analysis comparing downtown, edge-of-town and out-of-town shopping. In this comparison we use GPS to track 250 consumers over a time-span of two months in a Swedish region. The GPS-data enters the Oguchi’s formula to obtain shopping trip-specific CO2-emissions. We find that consumers’ out-of-town shopping would generate an excess of 60 per cent CO2-emissions whereas downtown and edge-of-town shopping centers are comparable.

Trips and their CO2 emissions induced by a shopping center

Most previous studies have focused on entire trips in a geographic region, while a few of them addressed trips induced by a city landmark. Therefore paper explores trips and their CO2 emissions induced by a shopping center from a time-space perspective and their usage in relocation planning. This is conducted by the means of a case study in the city of Borlänge in mid-Sweden where trips to the city’s largest shopping mall in its center are examined. We use GPS tracking data of car trips that end and start at the shopping center. Thereafter, (1) we analyze the traffic emission patterns from a time-space perspective where temporal patterns reveal an hourly-based traffic emission dynamics and where spatial patterns uncover a heterogeneous distribution of traffic emissions in spatial areas and individual street segments. Further, (2) this study reports that most of the observed trips follow an optimal route in terms of CO2 emissions. In this respect, (3) we evaluate how well placed the current shopping center is through a comparison with two competing locations. We conclude that the two suggested locations, which are close to the current shopping center, do not show a significant improvement in term of CO2 emissions.

Optimal retail location and CO2 emissions

In this paper, the p-median model is used to find the location of retail stores that minimizes CO2 emissions from consumer travel. The optimal location is then compared with the existing retail location,and the excess CO2 emissions compared with the optimal solution is calculated. The results show that by using the environmentally optimal location, CO2 emissions from consumer travel could be reduced by approximately 25percent. 

The effects of taxing truck distance on CO2 emissions from transports in retailing

To finance transportation infrastructure and to address social and environmental negative externalities of road transports, several countries have recently introduced or consider a distance based tax on trucks. In the competitive retail market such tax can be expected to lower the demand and thereby reduce CO2 emissions of road transports. However, as we show in this paper, such tax might also slow down the transition towards e-tailing. Considering that previous research indicates that a consumer switching from brick-and-mortar shopping to e-tailing reduces her CO2 emissions substantially, the direction and magnitude of the environmental net effect of the tax is unclear. In this paper, we assess the net effect in a Swedish regional retail market where the tax not yet is in place. We predict the net effect on CO2 emissions to be positive, but off-set by about 50% because of a slower transition to e-tailing.

Annual CO-emissions of combined pellet and solar heating systems

Emissions are an important aspect of a pellet heating system. High carbon monoxide emissions are often caused by unnecessary cycling of the burner when the burner is operated below the lowest combustion power. Combining pellet heating systems with a solar heating system can significantly reduce cycling of the pellet heater and avoid the inefficient summer operation of the pellet heater. The aim of this paper was to study CO-emissions of the different types of systems and to compare the yearly CO-emissions obtained from simulations with the yearly CO-emissions calculated based on the values that are obtained by the standard test methods. The results showed that the yearly CO-emissions obtained from the simulations are significant higher than the yearly CO-emissions calculated based on the standard test methods. It is also shown that for the studied systems the average emissions under these realistic annual conditions were greater than the limit values of two Eco-labels. Furthermore it could be seen that is possible to almost halve the CO-emission if the pellet heater is combined with a solar heating system.

CO2 Emissions, GDP and trade : a panel cointegration approach

This paper examines the relationships among per capita CO2 emissions, per capita GDP and international trade based on panel data sets spanning the period 1960-2008: one for 150 countries and the others for sub-samples comprising OECD and Non-OECD economies. We apply panel unit root and cointegration tests, and estimate a panel error correction model. The results from the error correction model suggest that there are long-term relationships between the variables for the whole sample and for Non-OECD countries. Finally, Granger causality tests show that there is bi-directional short-term causality between per capita GDP and international trade for the whole sample and between per capita GDP and CO2 emissions for OECD countries