Liquidity,information, strategic trading in an electronic order book: New insights from the European carbon markets

The electronic limit order book (LOB hereafter) has rapidly become the primary way of trading European carbon assets over the 4 years of the EU ETS programme (2008–2012). In this first attempt of examining the informational content of an electronic order book, we evidence that order flow imbalances have a moderate capacity to predict short term price changes. However, we find that both LOB slope and immediacy costs help to forecast quote improvements and volatility in the next 30 min. Further, we explain why informed trading is highly influential and show that it consists in mixing order splitting strategies and posting fleeting orders once the asymmetric information is reduced (Rosu, 2009). Overall, the consolidated status of the order book mirrors a high level of market uncertainty and a low degree of informational efficiency. In this way, strategic trading can in itself explain some of order book properties, independently of the degree of traders’ sophistication and market competition.     

Risk regulation,community pressure and the use of management accounting in managing climate change risk: Australian evidence

This exploratory study is amongst the first to investigate how companies perceive the regulation of carbon emissions and the pressure exerted by the community in an environment characterised by risk and uncertainty. Semi-structured interviews were conducted among 39 executives who were directly involved in carbon emissions management in 18 large listed Australian companies. Consistent with Prospect Theory, we find that decision-makers are threat biased and are more likely to take immediate actions when climate change issues are framed as threats as opposed to opportunities. From the interview data, it is seen that managers use management accounting techniques as a risk management tool in mitigating risks associated climate change issues. Furthermore, this use of management accounting appears to be driven primarily by the protection of economic interests, regulatory pressure and reputational pressure. The study provides insights into how perceptions of climate change uncertainties and external pressure for disclosure of emissions information influence companies to use management accounting in managing climate change risk.     

Research agenda for low-carbon mobility: Issues for New World cities

ABSTRACT

Low-carbon mobility (LCM) features strongly in debates about the sustainability of cities and their resilience in the face of demographic, economic, and climate change. Transport is a major source of carbon emissions and there are indications that these continue to increase, despite the considerable recent advances in vehicle, engine, and fuel technologies. Reducing carbon emissions from transport may become more difficult, not easier. A particular issue relates to the New World cities, typified by those of North America and Australasia, which largely developed from the latter half of the nineteenth century onward and whose transportation systems were largely based around private vehicle ownership and usage. These cities are typically composed of low-density, dispersed suburbs, which are highly car dependent and resource and carbon emission intensive. This article develops a research agenda directed at determining and testing policy and planning measures relevant to the quest for low carbon mobility in New World cities. It suggests a rich agenda for essential research on LCM. Much of this agenda falls within the realm of the integration of transport and land use, with attention to urban design details to enhance the perceptions of and opportunities to use low carbon transport alternatives. Research topics identified for LCM research include (1) urban design and land use–transport integration (LUTI), (2) low carbon mobility policies directed at achieving widespread behavior change, (3) opportunities for new technology and its application, including requirements for systems and infrastructure, and (4) analysis and tools for informed decision making, including modeling, measurement, visualization, and especially assessment.     

Effects of carbon emission reduction policies on transportation mode selections with stochastic demand

We are witnessing more frequent extreme weather events due to the global warming. There is an urgent need for governments, industries, general public, and academics to take coordinated actions in order to tackle the challenges imposed by the climate change. It is essential to incorporate the environmental objective in the transportation mode selection problem as transportation is a main contributor to carbon emissions. With this in mind, our paper studies the retailer’s ordering and transportation mode selection problem using stochastic customer demand and investigates the optimal ordering and transportation mode selection decisions under different carbon emission reduction policies. Our analytical results reveal that there are some important transportation mode shifting thresholds under different carbon emissions reduction policies. These findings do not only help firms to make optimal decisions under different carbon emission reduction policies but also support policy makers to develop effective policies on carbon emissions reduction.     

Corporate Ownership and Environmental Proactivity

The present paper advances knowledge of the drivers of firms' proactive environmental strategies. In particular, it explores the relationship between different corporate ownership structures and firms' green proactivity, in order to see whether some types of shareholder act as a stimulating driver for firms' proactive environmental behaviors. The study examines the explanatory power of corporate governance issues, such as a firm's ownership structure, as potential determinants of companies' environmental proactivity. Attention is focused on the European firms included into the Carbon Disclosure Project questionnaire 2012. The results show that ownership structure matters in firms' environmental proactivity. In particular, firms with a higher percentage of state ownership present superior green proactivity, while ownership concentration appears negatively related to proactive environmental strategy. The paper offers theoretical and practical implications. It focuses attention on a still underdeveloped research area, namely organizations and their relationship with the natural environment, including corporate ownership as a driver of a company's proactive environmental strategy. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment     

Agricultural landowners⿿ response to incentives for afforestation

Previous research has shown that afforestation of agricultural land is a relatively low-cost option compared to energy-based approaches for mitigating net carbon dioxide emissions, and that financial incentives affect landowner behavior and can be used to increase carbon sequestration on private land. In this paper we use stated preference data from private landowners in the Pacific Northwest region of the U.S. to examine the key factors affecting participation in an incentive program for carbon sequestration through afforestation. We also estimate the corresponding potential for carbon sequestration and its cost. Our results suggest that incentive payments would significantly and positively affect landowners⿿ level of enrollment in a tree planting program.     

Voluntary carbon offsetting: Who does it?

Voluntary carbon offsetting was popularised during the last decade, particularly by airlines, as a tool to ‘neutralise’ emissions associated with travel. Although there is a wide range of carbon offsetting schemes for tourism, the uptake of these programs has been reportedly low. Regardless, little research has explored the visitor segments who voluntarily undertake carbon offsetting. Consequently, this research investigates the prevalence of carbon offsetting amongst international tourists to Australia between 2008 and 2010 and, using cluster analysis, segments the carbon offsetters into three distinct markets. Findings reveal a stable carbon offsetting market, despite a Global Financial Crisis occurring during the reference period. Further, travellers from the United Kingdom/Europe were more likely to carbon offset, while those from Asia were less likely to participate in the schemes. Thus, this could indicate that the social marketing, public discourse and substantial media coverage in the United Kingdom/Europe had enhanced climate change mitigation behaviours.     

Intercorporate Ownership,Taxes, and Corporate Payout Choices*

This paper examines whether corporate payout choices (dividends or share repurchases) are associated with intercorporate ownership in a firm. Using the System for Electronic Document Analysis and Retrieval (SEDAR) and the Inter‐Corporate Ownership (ICO) database from Statistics Canada, I find that intercorporate ownership is positively associated with a firm’s propensity to pay dividends and negatively associated with a firm’s propensity to repurchase shares. The findings are robust to the endogeneity of intercorporate ownership and the inclusion of various control variables such as firm size, risk, liquidity, growth, and profitability.     

Exploring the green image of airlines: Passenger perceptions and airline choice

During the last few years there has been an increasing trend for companies to market their products or services as green or environmentally friendly as part of their corporate social responsibility. Few studies have analyzed the effects of this recent focus on the environment and its impact on airline passengers. Therefore, we examine passengers' general attitudes towards the green image of different airlines, perceived differences in eco-friendliness among these airlines, and effects on airline choice during booking. We also investigate how passengers' recent experiences with an airline affect perceived eco-friendliness of that airline. In addition we compare passenger ratings of airline eco-friendliness to those published by independent 3rd parties. Our findings show that the green image of airlines does influence airline choice during booking. We observed a passenger willingness to pay extra for a green image, however, not as much as their willingness to pay extra for amenities, such as additional legroom.     

An analysis of the greenhouse gas emissions profile of airlines flying the Australian international market

International commercial flights (with the exception of flights between countries in European Union including Iceland, Norway and Liechtenstein) are currently not subject to greenhouse gas emission reduction regulation. To formulate effective and efficiency policy to manage greenhouse gas emissions from air transport, policy makers need to determine the emissions profiles of all airlines currently flying into their country or region. In this paper, we use 2012 data on airlines' aircraft characteristics, passenger load and cargo load (obtained from statistics reported by Australian Government Bureau of Infrastructure, Transport and Regional Economics) to estimate the volume and carbon efficiency on each international route flying to and from Australia. This is the first study to use actual passenger and cargo load data to determine the greenhouse gas (specifically CO₂) efficiency of airlines operating in the Australian international aviation market. Airlines' CO₂ emission profile is dependent on many factors including but not limited to the aircraft used, payload, route taken, weather conditions. Our results reveal that the airlines’ CO₂ emission profile is not only dependent on the aircraft used and the number of passengers but also the amount of cargo on each flight.