Externality Valuation and Climate Finance


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Verdurous has worked extensively on mitigation and adaptation efforts and has developed a specialized focus in externality valuation and internalization of such environmental costs. Verdurous personnel have developed a volume on externality valuation brought out by Nova Publishers of New York, USA.

Experience


  • Verdurous has studied stock-market responses to CDM project acceptance / rejection over the various process steps and for projects that had applied with assets-in-place (retro-active applications) and forward looking applications. Recommendations were made to assess the genuine valuation of the externality being internalized.
  • To aid with mitigation, Verdurous has developed an economic valuation model and a payment mechanism for ecosystem services to encourage the growth and preservation of biologically diverse forest stands.
  • Verdurous has documented investor responses to the release of consecutive IPCC reports. It was observed that even as the projections made by the more recent IPCC reports were increasingly dire, the information release itself seemed to trigger an unemotional and perhaps short-lived response from investors.
  • Verdurous has reviewed and improved upon the “broker-assisted” model to alter behavioral patterns and to induce pro-environmental behavior through a “social-network” approach. The “man-in-the-middle” case studies analyzed include the community managed forest conservation program in Bhutan and the installation of low-cost water heaters in Brazil.
  • Verdurous has developed a synthetic currency to enhance the efficiency of externality valuation and trade, specifically to replace the Euro as a medium of exchange. The project also demonstrated enhanced market efficiency from employing the new basket currency, the “CERO”.
  • Given the specific and long-tenures intrinsic to climate-related investments, Verdurous has developed a model and a short-run discount rate mechanism to help conserve on natural capital and induce climate-conscious investments in the present. The discount rate model is applied to sustainable coffee production in Rwanda.