Responding to the EU Emissions Trading Scheme: an empirical analysis of corporate carbon disclosure strategy

The purpose of this paper is to explore how companies that hold carbon trading accounts under European Union Emissions Trading Scheme (EU ETS) respond to the climate change by using disclosures on carbon emissions as a means to generate legitimacy compared to others. The study is based on disclosures made in annual reports and stand-alone sustainability reports of UK listed companies from 2001- 2012. The study uses content analysis to capture both the quality and volume of the carbon disclosures. The results show that there is a significant increase in both the quality and volume of the carbon disclosures after the launch of EU ETS. Companies with carbon trading accounts provide greater detailed disclosures as compared to the others without an account. We also find that company size is positively correlated with the disclosures while the association with the industry produces an inconclusive result.

Palaeovegetation in China during the late Quaternary: Biome reconstructions based on a global scheme of plant functional types

Two previous reconstructions of palaeovegetation across the whole of China were performed using a simple classification of plant functional types (PFTs). Now a more explicit, global PFT classification scheme has been developed, and a substantial number of additional pollen records have become available. Here we apply the global scheme of PFTs to a comprehensive set of pollen records available from China to test the applicability of the global scheme of PFTs in China, and to obtain a well-founded reconstruction of changing palaeovegetation patterns. A total of 806 pollen surface samples, 188 mid-Holocene (MH, 6000 14C yr BP) and 50 last glacial maximum (LGM, 18,000 14C yr BP) pollen records were used to reconstruct vegetation patterns in China, based on a new global classification system of PFTs and a standard numerical technique for biome assignment (biomization). The biome reconstruction based on pollen surface samples showed convincing agreement with present potential natural vegetation. Coherent patterns of change in biome distribution between MH, LGM and present are observed. In the MH, cold and cool-temperate evergreen needleleaf forests and mixed forests, temperate deciduous broadleaf forest, and warm-temperate evergreen broadleaf and mixed forest in eastern China were shifted northward by 200–500 km. Cold-deciduous forest in northeastern China was replaced by cold evergreen needleleaf forest while in central northern China, cold-deciduous forest was present at some sites now occupied by temperate grassland and desert. The forest–grassland boundary was 200–300 km west of its present position. Temperate xerophytic shrubland, temperate grassland and desert covered a large area on the Tibetan Plateau, but the area of tundra was reduced. Treeline was 300–500 m higher than present in Tibet. These changes imply generally warmer winters, longer growing seasons and more precipitation during the MH. Westward shifts of the forest–shrubland–grassland and grassland–desert boundaries imply greater moisture availability in the MH, consistent with a stronger summer monsoon. During the LGM, in contrast, cold-deciduous forest, cool-temperate evergreen needleleaf forest, cool mixed forests, warm-temperate evergreen broadleaf and mixed forest in eastern China were displaced to the south by 300–1000 km, while temperate deciduous broadleaf forest, pure warm-temperate evergreen forest, tropical semi-evergreen and evergreen broadleaf forests were restricted or absent from the mainland of southern China, implying colder winters than present. Strong shifts of temperate xerophytic shrubland, temperate grassland and desert to the south and east in northern and western China and on the Tibetan Plateau imply drier conditions than present.

Development of the Surface Urban Energy and Water balance Scheme (SUEWS) for cold climate cities

The Surface Urban Energy and Water Balance Scheme (SUEWS) is developed to include snow. The processes addressed include accumulation of snow on the different urban surface types: snow albedo and density aging, snow melting and re-freezing of meltwater. Individual model parameters are assessed and independently evaluated using long-term observations in the two cold climate cities of Helsinki and Montreal. Eddy covariance sensible and latent heat fluxes and snow depth observations are available for two sites in Montreal and one in Helsinki. Surface runoff from two catchments (24 and 45 ha) in Helsinki and snow properties (albedo and density) from two sites in Montreal are also analysed. As multiple observation sites with different land-cover characteristics are available in both cities, model development is conducted independent of evaluation. The developed model simulates snowmelt related runoff well (within 19% and 3% for the two catchments in Helsinki when there is snow on the ground), with the springtime peak estimated correctly. However, the observed runoff peaks tend to be smoother than the simulated ones, likely due to the water holding capacity of the catchments and the missing time lag between the catchment and the observation point in the model. For all three sites the model simulates the timing of the snow accumulation and melt events well, but underestimates the total snow depth by 18–20% in Helsinki and 29–33% in Montreal. The model is able to reproduce the diurnal pattern of net radiation and turbulent fluxes of sensible and latent heat during cold snow, melting snow and snow-free periods. The largest model uncertainties are related to the timing of the melting period and the parameterization of the snowmelt. The results show that the enhanced model can simulate correctly the exchange of energy and water in cold climate cities at sites with varying surface cover.

Meteorological forcing data for urban outdoor thermal comfort models from a coupled convective boundary layer and surface energy balance scheme

Site-specific meteorological forcing appropriate for applications such as urban outdoor thermal comfort simulations can be obtained using a newly coupled scheme that combines a simple slab convective boundary layer (CBL) model and urban land surface model (ULSM) (here two ULSMs are considered). The former simulates daytime CBL height, air temperature and humidity, and the latter estimates urban surface energy and water balance fluxes accounting for changes in land surface cover. The coupled models are tested at a suburban site and two rural sites, one irrigated and one unirrigated grass, in Sacramento, U.S.A. All the variables modelled compare well to measurements (e.g. coefficient of determination = 0.97 and root mean square error = 1.5 °C for air temperature). The current version is applicable to daytime conditions and needs initial state conditions for the CBL model in the appropriate range to obtain the required performance. The coupled model allows routine observations from distant sites (e.g. rural, airport) to be used to predict air temperature and relative humidity in an urban area of interest. This simple model, which can be rapidly applied, could provide urban data for applications such as air quality forecasting and building energy modelling, in addition to outdoor thermal comfort.

Obstacle avoidance routing scheme through optimal sink movement for home monitoring and mobile robotic consumer devices

In recent years, ZigBee has been proven to be an excellent solution to create scalable and flexible home automation networks. In a home automation network, consumer devices typically collect data from a home monitoring environment and then transmit the data to an end user through multi-hop communication without the need for any human intervention. However, due to the presence of typical obstacles in a home environment, error-free reception may not be possible, particularly for power constrained devices. A mobile sink based data transmission scheme can be one solution but obstacles create significant complexities for the sink movement path determination process. Therefore, an obstacle avoidance data routing scheme is of vital importance to the design of an efficient home automation system. This paper presents a mobile sink based obstacle avoidance routing scheme for a home monitoring system. The mobile sink collects data by traversing through the obstacle avoidance path. Through ZigBee based hardware implementation and verification, the proposed scheme successfully transmits data through the obstacle avoidance path to improve network performance in terms of life span, energy consumption and reliability. The application of this work can be applied to a wide range of intelligent pervasive consumer products and services including robotic vacuum cleaners and personal security robots1.

Nonlinear identification using orthogonal forward regression with nested optimal regularization

An efficient data based-modeling algorithm for nonlinear system identification is introduced for radial basis function (RBF) neural networks with the aim of maximizing generalization capability based on the concept of leave-one-out (LOO) cross validation. Each of the RBF kernels has its own kernel width parameter and the basic idea is to optimize the multiple pairs of regularization parameters and kernel widths, each of which is associated with a kernel, one at a time within the orthogonal forward regression (OFR) procedure. Thus, each OFR step consists of one model term selection based on the LOO mean square error (LOOMSE), followed by the optimization of the associated kernel width and regularization parameter, also based on the LOOMSE. Since like our previous state-of-the-art local regularization assisted orthogonal least squares (LROLS) algorithm, the same LOOMSE is adopted for model selection, our proposed new OFR algorithm is also capable of producing a very sparse RBF model with excellent generalization performance. Unlike our previous LROLS algorithm which requires an additional iterative loop to optimize the regularization parameters as well as an additional procedure to optimize the kernel width, the proposed new OFR algorithm optimizes both the kernel widths and regularization parameters within the single OFR procedure, and consequently the required computational complexity is dramatically reduced. Nonlinear system identification examples are included to demonstrate the effectiveness of this new approach in comparison to the well-known approaches of support vector machine and least absolute shrinkage and selection operator as well as the LROLS algorithm.

Recent lake-level and outflow variations at Lake Viljandi, Estonia: validation of a coupled lake-catchment modelling scheme for climate change studies

Changes in the depth of Lake Viljandi between 1940 and 1990 were simulated using a lake water and energy-balance model driven by standard monthly weather data. Catchment runoff was simulated using a one-dimensional hydrological model, with a two-layer soil, a single-layer snowpack, a simple representation of vegetation cover and similarly modest input requirements. Outflow was modelled as a function of lake level. The simulated record of lake level and outflow matched observations of lake-level variations (r = 0.78) and streamflow (r = 0.87) well. The ability of the model to capture both intra- and inter-annual variations in the behaviour of a specific lake, despite the relatively simple input requirements, makes it extremely suitable for investigations of the impacts of climate change on lake water balance.

Regularization of descriptor systems

Implicit dynamic-algebraic equations, known in control theory as descriptor systems, arise naturally in many applications. Such systems may not be regular (often referred to as singular). In that case the equations may not have unique solutions for consistent initial conditions and arbitrary inputs and the system may not be controllable or observable. Many control systems can be regularized by proportional and/or derivative feedback.We present an overview of mathematical theory and numerical techniques for regularizing descriptor systems using feedback controls. The aim is to provide stable numerical techniques for analyzing and constructing regular control and state estimation systems and for ensuring that these systems are robust. State and output feedback designs for regularizing linear time-invariant systems are described, including methods for disturbance decoupling and mixed output problems. Extensions of these techniques to time-varying linear and nonlinear systems are discussed in the final section.

Designing a sampling scheme to reveal correlations between weeds and soil properties at multiple spatial scales

Weeds tend to aggregate in patches within fields and there is evidence that this is partly owing to variation in soil properties. Because the processes driving soil heterogeneity operate at different scales, the strength of the relationships between soil properties and weed density would also be expected to be scale-dependent. Quantifying these effects of scale on weed patch dynamics is essential to guide the design of discrete sampling protocols for mapping weed distribution. We have developed a general method that uses novel within-field nested sampling and residual maximum likelihood (REML) estimation to explore scale-dependent relationships between weeds and soil properties. We have validated the method using a case study of Alopecurus myosuroides in winter wheat. Using REML, we partitioned the variance and covariance into scale-specific components and estimated the correlations between the weed counts and soil properties at each scale. We used variograms to quantify the spatial structure in the data and to map variables by kriging. Our methodology successfully captured the effect of scale on a number of edaphic drivers of weed patchiness. The overall Pearson correlations between A. myosuroides and soil organic matter and clay content were weak and masked the stronger correlations at >50 m. Knowing how the variance was partitioned across the spatial scales we optimized the sampling design to focus sampling effort at those scales that contributed most to the total variance. The methods have the potential to guide patch spraying of weeds by identifying areas of the field that are vulnerable to weed establishment.

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.

Analysis Scheme in the Ensemble Kalman Filter

This paper discusses an important issue related to the implementation and interpretation of the analysis scheme in the ensemble Kalman filter . I t i s shown that the obser vations must be treated as random variables at the analysis steps. That is, one should add random perturbations with the correct statistics to the obser vations and generate an ensemble of obser vations that then is used in updating the ensemble of model states. T raditionally , this has not been done in previous applications of the ensemble Kalman filter and, as will be shown, this has resulted in an updated ensemble with a variance that is too low . This simple modification of the analysis scheme results in a completely consistent approach if the covariance of the ensemble of model states is interpreted as the prediction error covariance, and there are no further requirements on the ensemble Kalman filter method, except for the use of an ensemble of sufficient size. Thus, there is a unique correspondence between the error statistics from the ensemble Kalman filter and the standard Kalman filter approach

A joint state and parameter estimation scheme for nonlinear dynamical systems

We present a novel algorithm for concurrent model state and parameter estimation in nonlinear dynamical systems. The new scheme uses ideas from three dimensional variational data assimilation (3D-Var) and the extended Kalman filter (EKF) together with the technique of state augmentation to estimate uncertain model parameters alongside the model state variables in a sequential filtering system. The method is relatively simple to implement and computationally inexpensive to run for large systems with relatively few parameters. We demonstrate the efficacy of the method via a series of identical twin experiments with three simple dynamical system models. The scheme is able to recover the parameter values to a good level of accuracy, even when observational data are noisy. We expect this new technique to be easily transferable to much larger models.