Evaluation of Power Investment Decisions - MyAssignmenthelp.com

Question: Discussn about the Evaluation of Power Investment Decisions. Answer: Introduction: Coalition policy and Labor support policy both policies support emissions reduction of Australia .However, their mechanism differs from each other. Labor carbon pricing shows that countrys largest polluters have to pay for the pollution amount and for this they are given incentive in order to reduce emissions. Coalition policy shows that, businesses compete to win tenders and for this they are paid to undertake emission reduction projects. The Coalition aims to create an environmental friendly workforce in order to undertake conservation projects. The revenue earned from a carbon price gives funds to support extra cuts and help those who are affected by the price to adapt. Thus effective direct action plan needed in order to stop imperfect incentive. Direct action can be applied to activities that cannot be incorporated in a carbon trading scheme (Mey and Hicks, 2015) (Wade and Hutchens, 2013). Both ETSs are associated with global carbon markets since they allow the importing of the majority of the Kyoto Protocol emission units. Both issues emitters free allocation, without any auctions proposed in the short term. If EU ETS initial price of carbon is high then NZ ETS net buyers of emissions would incur loss while EU ETS net sellers will gain, this is due to the fact, carbon tax in EU ETS makes trade costly thus loss occurs in the country which is involved in it. Pricing of carbon result in higher prices of carbon intensive goods and services thus provide incentives to reduce emissions, with higher carbon prices emissions reduction. (Bell,2017) (Shahnazari,2014). References Bell, W.P., Wild, P., Foster, J. and Hewson, M., 2017. Revitalising the wind power induced merit order effect to reduce wholesale and retail electricity prices in Australia.Energy Economics,67, pp.224-241. Mey, F. and Hicks, J., 2015, June. Community renewable energy in Australia: exploring its character emergence in the context of climate change action. In5th EMES International Research Conference on Social Enterprise. Helsinki(pp. 1-24). Shahnazari, M., McHugh, A., Maybee, B. and Whale, J., 2014. Evaluation of power investment decisions under uncertain carbon policy: A case study for converting coal fired steam turbine to combined cycle gas turbine plants in Australia.Applied Energy,118, pp.271-279. Wade, M. and Hutchens, G., 2013. Tony Abbotts new direct action sceptics.The Sydney Morning Herald. Worldbank(2017).[online]Availableat:https://data.worldbank.org/indicator/EN.ATM.CO2E.PC?end=2014locations=AUstart=2014view=bar