• ISSN: 2301-3567 (Print), 2972-3981 (Online)
    • Abbreviated Title: J. Econ. Bus. Manag.
    • Frequency: Quarterly
    • DOI: 10.18178/JOEBM
    • Editor-in-Chief: Prof. Eunjin Hwang
    • Executive Editor: Ms. Fiona Chu
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HOME > Archive > 2018 > Volume 6 Number 3 (Aug. 2018) >
JOEBM 2018 Vol.6(3): 91-96 ISSN: 2301-3567
DOI: 10.18178/joebm.2018.6.3.556

Research on the Investment Valuation of the CCER Project for Waste-to-Power Based on the Real Option Model

Dai Chunyan, Wang Yixian, and Zhou Yanling

Abstract— The Chinese Certified Emission Reduction Waste-to-Power project has the characteristics of investment irreversibility, earnings uncertainty and investment growth. Due to those characteristics, the traditional discounted cash flow (DCF) method has not been suitable for the investment evaluation of such projects. This research fully measures the additional benefits that brought by the uncertainty of CCER transaction price, especially considers the impact of CCER transaction price volatility on the option value, and then by using the B-S pricing model theory, builds an investment value evaluation model of CCER Waste-to-Power projects which is based on real options. Turning a Waste-to-Power project into application, this paper tests the validity and rationality of the model, so as to provide a reference for enterprise investment decisions and promote the healthy and orderly development of the CCER mechanism.

Index Terms— Real option model, waste-to-power, Chinese certified emission reductions, investment decisions.

Chunyan Dai is with the National Research Center for Upper Yangtze Economy of Chongqing Technology and Business University, National Research Base of Intelligent Manufacturing Service of Chongqing Technology and Business University, China (e-mail: 1212971@qq.com). Yixian Wang is with the Engineering Center of Chongqing Technology and Business University, China (e-mail: 705593420@qq.com). Zhou Yanling is with the Energy Management and Low Carbon Development Research Center of Chongqing Technology and Business University, China (e-mail: 1060616528@qq.com).

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Cite: Dai Chunyan, Wang Yixian, and Zhou Yanling, "Research on the Investment Valuation of the CCER Project for Waste-to-Power Based on the Real Option Model," Journal of Economics, Business and Management vol. 6, no.3, pp. 91-96, 2018.

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