Postgraduate Course: Low Carbon Investment (CMSE11191)
Course Outline
| School | Business School |
College | College of Humanities and Social Science |
| Credit level (Normal year taken) | SCQF Level 11 (Postgraduate) |
Availability | Not available to visiting students |
| SCQF Credits | 15 |
ECTS Credits | 7.5 |
| Summary | The 2009 Copenhagen Accord promises to deliver new, additional resources from developed to developing countries to mitigate and adapt to climate change, of US$30 billion/year over 2010-2012, scaling up to US$100 billion/year by 2020 (UNFCCC, 2009). At the same time, the IEA estimates that new, additional investment of, on average, US$500 billion/year will be required to 2030, mainly in developed countries, to move to a global low-carbon economy (IEA World Energy Outlook, 2009). While carbon markets will undoubtedly continue to play a very important role, these substantial financial flows will not be created and delivered by carbon markets and internalising the price of carbon alone. A variety of different mechanisms, including both public and private sector finance, will be required for different technologies, sectors and countries. This course aims to provide students with an understanding of the nature of these new financial flows and the implications and opportunities for business. |
| Course description |
The course aims to provide students with an understanding of trajectories towards a low-carbon economy and what this implies in terms of investment requirements and opportunities at different points in time, in different countries and sectors. Students should come away from the course with an understanding of the key financial flows and strategies that are unlikely to be mediated by carbon markets alone. Students should be able to apply their understanding of investment appraisal to investment decisions made by various types of investors such as individuals, private equity funds, pension funds, insurances or green mutual funds. Students are expected to learn how these investors operate and what attracts them to investment in low carbon projects.
Syllabus
Introduction to Investment in a Low Carbon Economy
The role of Policy in Low-Carbon Investment
Community Renewables
Investment appraisal
Transport
Buildings
Insurance
Student Learning Experience:
The course will be taught through weekly 2-hour lectures and 1-hour tutorials and/or seminars. Most weeks will include a case study, group exercise or other interactive discussion component in the seminar session.
The course includes a number of group and individual exercises. For each of these, groups and individuals will be expected to work on the exercises either in-class or in the time between the lecture and the corresponding tutorial session.
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Entry Requirements (not applicable to Visiting Students)
| Pre-requisites |
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Co-requisites | |
| Prohibited Combinations | |
Other requirements | None |
Course Delivery Information
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| Academic year 2015/16, Not available to visiting students (SS1)
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Quota: None |
| Course Start |
Semester 2 |
Timetable |
Timetable |
| Learning and Teaching activities (Further Info) |
Total Hours:
150
(
Lecture Hours 20,
Seminar/Tutorial Hours 10,
Programme Level Learning and Teaching Hours 3,
Directed Learning and Independent Learning Hours
117 )
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| Assessment (Further Info) |
Written Exam
0 %,
Coursework
100 %,
Practical Exam
0 %
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| Additional Information (Assessment) |
Group presentations and report to class - 30%
Individual essay of up to 3,000 words - 70% |
| Feedback |
All students will be given at least one formative feedback or feedforward event for every course they undertake, provided during the semester in which the course is taken and in time to be useful in the completion of summative work on the course. Such feedback may be at course or programme level, but must include input of relevance to each course in the latter case.
Feedback on formative assessed work will be provided within 15 working days of submission, or in time to be of use in subsequent assessments within the course, whichever is sooner. Summative marks will be returned on a published timetable, which has been made clear to students at the start of the academic year.
Students will gain feedback on their understanding of the material when they discuss their answers to the tutorial questions in the tutorials. Students may also ask questions in Lectures to assess their knowledge.
The feedback consists of student case example, formal presentations to the group, and group reports in form of poster.
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| No Exam Information |
Learning Outcomes
On completion of this course, the student will be able to:
- Describe and critically evaluate the challenges and opportunities for low-carbon investment.
- Understand and critically discuss the different types of institutional and individual investors: their business model, institutional framework, incentive structures and the role of low carbon investment opportunities on their dashboards.
- Understand and critically discuss institutional investors' practices in portfolio management.
- Understand and critically evaluate different innovative financial instruments for supporting low carbon investments.
- Critically evaluate an individual investment proposition from different perspectives, with a focus on commercial low carbon investment but also acknowledging wider social cost-benefit.
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Reading List
Note: the following is subject to change.
Required Readings:
Week 01: Introduction to Low Carbon Investment
-IEA (2015). Projected Costs of Generating Electricity.
Link: https://www.iea.org/Textbase/ npsum/ElecCost2015SUM.pdf
Week 02: The Role of Policy in Low Carbon Investment
-Harnmeijer A., Harnmeijer J., Slee B. (in press). Crossing the Rubicon: the 2015 renewable electricity reforms and implications for Scotland. In: G. Wood, K. Baker (editors) 'A Critical Review of Scottish Renewable and Low Carbon Energy Policy'. Pelgrave Macmillan.
-Spash (2010)._The brave new world of carbon trading. New Political Economy 15(2).
Week 03: Community Renewables
-Harnmeijer J. et al. 2015. The Comparative Costs of Community and Commercial Renewable Energy Projects in Scotland - Full Report. Scottish Government / ClimateXChange.
Link: http://www.climatexchange.org.uk/index.php/download_file/581/347/
Week 04: The Role of Information & Communications Technology (ICT) in off-grid finance
-Allstone et al. (2015). Decentralized energy systems for clean energy access. Nature Climate Change 5, pp. 305-314.
Week 05: RD&D, Technology Learning and Venture Capital
-IEA (2009). Global gaps in clean energy research, development and demonstration.
Link: http://www.iea.org/publications/freepublications%2fpublication%2fglobal_gaps_in_clean_energy.pdf
Week 06: Long-term Investment and Climate Change
[To be determined]
Week 07: Development of Renewable Technology Option 1
[To be determined]
Week 08: Insurance & Low Carbon Investment
-Understanding the Climate & Insurance Market
Link: https://openknowledge.worldbank.org/bitstream/handle/10986/4533/deor_10_1_30.pdf?sequence=1
-Insurability of CO2 Storage Risk
Link: http://www.climatewise.org.uk/storage/_website-2012/collaborations/ccs/ClimateWise%20CCS%20Report%20Nov%202012%20-%20Full%20Report.pdf
Week 09: Investment Proposal Presentations
[Investment Proposal Presentations]
Week 10: Low Carbon Building
Week 11: Socially Responsible Investment
-Renneboog, L., Horst, J.T., Zhang, C., 2011. Is ethical money financially smart? Nonfinancial attributes and money flows of socially responsible investment funds.
-Hoepner, A. G. F., Rezec, M., Siegl, S., 2011. Does pension funds' fiduciary duty prohibit the integration of any ESG criteria in investment processes? A realistic prudent investment test.
-Hoepner, A. G. F., Yu, P. S., Ferguson, J., 2010. Corporate social responsibility across industries: When can who do well by doing good?
[Others may be added]
Recommended Readings:
-Palisade Discount Cash Flow Models and Videos.
Link: http://www.palisade.com/examples/en/risk/DiscountedCashFlows/
-Leggett J., 2013. The Energy of Nations.
-Downey M., 2009. Oil 101.
-Oulton W., 2012. Investment Opportunities for a Low-carbon World. Second Edition. Environmental Finance Publications.
-Wright M., Sapienza H.J., Busenitz L.W., 2008. Venture Capital Funding. Stephen Bloomfield.
-Chapter 11 in the IPCC Special Report on Renewable Energy Sources and Climate Change Mitigation.
Link: http://srren.ipcc-wg3.de/report
-UK Renewable Energy Roadmap.
Link: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/48128/2167-uk-renewable-energy-roadmap.pdf
Additional Readings:
-Chinese Overseas Investment in Wind and Solar.
Link: http://www.wri.org/sites/default/files/pdf/chinas_overseas_investments_in_wind_and_solar_trends_and_drivers.pdf
-Climate Bond Initiative and Bonds Overview
Link 1: http://www.climatebonds.net/resources/intro-doc/intro-to-bonds/
Link 2: http://www.climatebonds.net/resources/intro-doc/climate-bonds-for-beginners/
-Olivier de, L., 2001. Bond pricing and portfolio analysis protecting investors in the long run. Cambridge, Mass.
-Link, A.N., 2006. Public/private partnerships: innovation strategies and policy alternatives. Springer.
-Yescombe, E.R., 2007. Public-private partnerships: principles of policy and finance. Elsevier Finance
-World Resource Institute, 2008. Financing Adaptation: Opportunities for Innovation and Experimentation.
Link: http://www.wri.org/publication/financing-adaptation |
Additional Information
| Graduate Attributes and Skills |
Cognitive Skills
After completing this course, students should be able to:
* Critically evaluate an individual investment proposition from different perspectives, with a focus on commercial low carbon investment but also acknowledging wider social cost-benefit
* Conceptualise key strategic considerations associated with low-carbon investment;
* Cooperate with others from different professional, educational and cultural backgrounds to produce group analysis and present the results of group work.
Subject-Specific Skills
After completing this course, students should be able to:
* Identify low carbon investment opportunities for different types of institutional investors;
* Undertake an appraisal of a specific low-carbon investment opportunity;
* Analyse the evolution in low-carbon investment policy frameworks, and evaluate the implications for business;
* Evaluate the risks and opportunities associated with low-carbon investments in different sectors;
* Understand, speak and write the language of low-carbon investment;
* Develop a project investment proposal.
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| Keywords | Not entered |
Contacts
| Course organiser | Jelte Harnmeijer
Tel:
Email: jelte.harnmeijer@ed.ac.uk |
Course secretary | Miss Ashley Harper
Tel: (0131 6)51 5671
Email: Ashley.Harper@ed.ac.uk |
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