Financial modelling of carbon reduction investment strategies 'marginal abatement cost MAC curves'

Blake, Martin and Strong, David and Lydiard-Wilson, Jonathan (2011) Financial modelling of carbon reduction investment strategies 'marginal abatement cost MAC curves'. In: How to reduce costs, business risks, energy usage and carbon emission while maximising investment returns, 11 May 2011, London, England.

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Abstract

Defra stated that UK organisations could make £7m a day in energy efficiency savings, equating to £25 billion worth of cost reductions for UK plc. Energy is currently a cheap commodity and even with smart energy procurement most organisations could be wasting up to 40% of their spend. We will show you firsthand examples of how organisations have transformed their energy and cost base through integrated carbon reduction strategies with little or no upfront investment. With the recent Energy Market Review (EMR) and the government putting a carbon floor price in place, energy costs are likely to dramatically increase over the next few years. Finance officers are now responsible for the vital role of reducing energy (carbon) costs whilst managing cost volatility and meeting government targets and reporting requirements. Your challenge is in building an integrated sustainability strategy that enables you to make informed investment decisions based on the right quantitative and qualitative data and supported with appropriate return on investment modelling. As leaders, you constantly want more evidence that sustainability investments will create tangible returns but all too often investment opportunities get missed when a soft business cases are presented without the correct energy data and financial modelling to establish the true investment potential. The Royal Mail is one of the biggest property owners, employers and logistics & distribution companies in the world. In 2006 they embarked on an energy transformation journey that saved them £35m a year, reducing their energy spend by 45%. Dr Martin Blake, then head of Sustainability for the Royal Mail Group, who led this work, will share his experiences and insights. Investment Grade MAC Curves Marginal Abatement Cost (MAC) curve have been around for some time to assess government policy and national energy investment strategies. Using MAC curves in an organisational or corporate setting is a comparatively new technique and requires access to energy and investment data combined with technical informational and risk & costs modelling. When skilfully developed, a MAC curve can be a fantastic and extremely informative investment tool that allows allow you to accurately evaluate between projects and balance ROI with carbon reduction, regulatory and financial targets. What will you learn? The seminar has brought together the experts who will break down the critical aspects of aligning your sustainability strategy to a solid financial plan. This will help you reduce risks, costs and emissions at better understood financial rates of return. You will benefit from: • Examples of businesses cases which have supported investment decisions in creating attractive ROIs • Understand the data requirements - qualitative, quantitative and financial - needed for accurate business modelling • Insights into how Marginal Abatement Cost curves really works and how it they are used to provide the basis for investment decisions • The necessity for embedding longer term adaption strategies into your business plans • How to align financial and sustainability objectives to create clear actions that you can replicate


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Item Type: Conference or Workshop Item (Commonwealth Reporting Category E) (Lecture)
Refereed: No
Item Status: Live Archive
Additional Information: No evidence of copyright restrictions preventing deposit. Only abstract published, as provided here.
Depositing User: epEditor USQ
Faculty / Department / School: Historic - Faculty of Business and Law - No Department
Date Deposited: 05 Jul 2012 05:36
Last Modified: 03 Jul 2013 00:42
Uncontrolled Keywords: carbon reduction; sustainable business; energy reduction; carbon price
Fields of Research (FOR2008): 15 Commerce, Management, Tourism and Services > 1502 Banking, Finance and Investment > 150205 Investment and Risk Management
15 Commerce, Management, Tourism and Services > 1503 Business and Management > 150307 Innovation and Technology Management
15 Commerce, Management, Tourism and Services > 1501 Accounting, Auditing and Accountability > 150106 Sustainability Accounting and Reporting
Socio-Economic Objective (SEO2008): B Economic Development > 91 Economic Framework > 9199 Other Economic Framework > 919901 Carbon and Emissions Trading
URI: http://eprints.usq.edu.au/id/eprint/19291

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