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Improving Long-Term Investment Decisions under Uncertainty: Applications for the Swedish Energy Sector

Abstract:
The oil price shocks in the 1970s illuminated the vulnerability of modern economies when all planning assumes everything to be going on just as usual. How is it then possible to insure against events such as oil price shocks? What will it cost and what will be the return? These are the central issues in this paper.

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Energy Specializations: Energy Investment and Finance – Public and Private Risks, Risk Management

JEL Codes: Q42: Alternative Energy Sources, Q48: Energy: Government Policy, D81: Criteria for Decision-Making under Risk and Uncertainty, Q35: Hydrocarbon Resources

Keywords: Oil price shocks, Long-term investment decisions, Uncertainty, Swedish energy sector

DOI: 10.5547/ISSN0195-6574-EJ-Vol9-No2-5

Published in Volume 9, Number 2 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.

 

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