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on Project, Program and Portfolio Management |
| By: | Joaquin Vespignani; Russell Smyth |
| Abstract: | This paper employs insights from earth science on the financial risk of project developments to present an economic theory of critical minerals. Our theory posits that back-ended critical mineral projects that have unaddressed technical and nontechnical barriers, such as those involving lithium and cobalt, exhibit an additional risk for investors which we term the “back-ended risk premium†. We show that the back-ended risk premium increases the cost of capital and, therefore, has the potential to reduce investment in the sector. We posit that the back-ended risk premium may also reduce the gains in productivity expected from artificial intelligence (AI) technologies in the mining sector. Progress in AI may, however, lessen the back-ended risk premium itself through shortening the duration of mining projects and the required rate of investment through reducing the associated risk. We conclude that the best way to reduce the costs associated with energy transition is for governments to invest heavily in AI mining technologies and research. |
| Keywords: | critical minerals, artificial Intelligence, risk premium |
| JEL: | Q02 Q40 Q50 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2024-30&r= |
| By: | Johannes Hoelzemann; Gustavo Manso; Abhishek Nagaraj; Matteo Tranchero |
| Abstract: | We examine innovative contexts like scientific research or technical R&D where agents must search across many potential projects of varying and uncertain returns. Is it better to possess incomplete but accurate data on the value of some projects, or might there be cases where it is better to explore on a blank slate? While more data usually improves welfare, we present a theoretical framework to understand how it can unexpectedly decrease it. In our model of the streetlight effect, we predict that when data shines a light on attractive but not optimal projects, it can severely narrow the breadth of exploration and lower individual and group payoffs. We test our predictions in an online lab experiment and show that the availability of data on the true value of one project can lower individual payoffs by 17% and reduce the likelihood of discovering the optimal outcome by 54% compared to cases where no data is provided. Suggestive empirical evidence from genetics research illustrates our framework in a real-world setting: data on moderately promising genetic targets delays valuable discoveries by 1.6 years on average. Our paper provides the first systematic examination of the streetlight effect, outlining the conditions under which data leads agents to look under the lamppost rather than engage in socially beneficial exploration. |
| JEL: | C73 C92 D81 D83 O31 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32401&r= |
| By: | Delia Sanchez Trancon; Guy Halpern |
| Abstract: | This paper is part of a subset of working papers within the Environment Working Paper series, presenting research on the enabling environment for investment in water security. The subset includes country and regional projects aimed at pilot testing the Scorecard, designed to assess the enabling environment for investment in water security. The paper “Assessing the Enabling Conditions for Investment in Water Security: Scorecard Pilot Test in Asian Countries” delineates the findings from the initial phase. This paper marks the commencement of the second round of pilot tests in the EU’s Eastern Partnership Countries. It presents the results obtained from assessing the enabling environment for investment in water security in Armenia, using the Scorecard. It also presents policy recommendations based on the priority investment barriers identified during stakeholder consultations in the country, involving representatives from various Ministries engaged in water security and international donors. The assessment and recommendations cover the public investment framework and its impact on water-related sectors, the water investment framework, project bankability and sustainability, as well as the contribution of other economic sectors to water security. |
| Keywords: | Armenia, data, enabling environment, investment, irrigation, policy, public and private finance, regulation, sanitation, tool, wastewater, water resource management, water security, water supply |
| JEL: | H23 H41 H51 H54 L32 L38 L50 L95 L98 Q25 Q53 Q54 Q58 |
| Date: | 2024–05–29 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envaaa:241-en&r= |
| By: | Alessandro Lizzeri; Eran Shmaya; Leeat Yariv |
| Abstract: | Starting from Robbins (1952), the literature on experimentation via multi-armed bandits has wed exploration and exploitation. Nonetheless, in many applications, agents' exploration and exploitation need not be intertwined: a policymaker may assess new policies different than the status quo; an investor may evaluate projects outside her portfolio. We characterize the optimal experimentation policy when exploration and exploitation are disentangled in the case of Poisson bandits, allowing for general news structures. The optimal policy features complete learning asymptotically, exhibits lots of persistence, but cannot be identified by an index a la Gittins. Disentanglement is particularly valuable for intermediate parameter values. |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2404.19116&r= |
| By: | Ekonomou, George; Halkos, George |
| Abstract: | Climate change and environmental degradation constitute challenging and demanding issues that need mitigation and adaptation strategies and plans, as well as scientific research to test the causality between economic growth and pollution levels. From this viewpoint, the present theoretical approach defines the concept of circular economy in the high-leverage economic sector, which is the agribusiness sector. A circular economy approach can help agribusiness develop its potential in terms of quality and sustainability without losing its economic orientation and perspective. The circular economy assists in becoming competitive, producing eco-friendly products, minimizing materials used and wastes, and protecting the good ecological status of natural resources, such as land and water resources. Management approaches such as the project management methodology and the construction of a circular business model canvas will provide a solid bedrock on which the circular economy projects within the business will create tangible and sustainable results in a sustainable manner. Furthermore, the concept of environmental benchmarking is a valuable tool for comparing the business's environmental performance with those considered leaders or bets in class in the field. |
| Keywords: | Environmental degradation; circular economy; agribusiness sector; sustainability. |
| JEL: | Q10 Q13 Q18 Q50 Q53 Q54 Q56 Q58 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120929&r= |
| By: | Helen Laubenstein; Xavier Leflaive |
| Abstract: | This paper examines three sets of issues related to strategic investment planning and financing for water: i) Investment planning in an uncertain context; ii) The benefits of supplementing project level planning with a consideration for pathways of investments; iii) Facilitating access to a wider range of financing sources, most importantly commercial finance. Together these issues can enhance the performance of water-related finance, making the best use of available finance and assets, in a context marked by high-level of (public and private) debt and rising cost of finance. This is the first in a sub-set of four working papers within the Environment Working Paper series destined to support the further implementation of the economic pillar of the Water Framework Directive. The four papers are best read in combination and provide lessons which are relevant beyond the European Union. |
| Keywords: | financing strategy, infrastructure finance, investment pathway, investment planning, water finance |
| JEL: | H23 H54 H76 O21 Q21 Q25 Q28 Q53 Q58 |
| Date: | 2024–05–24 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envaaa:237-en&r= |
| By: | Soucy, Andre B. |
| Abstract: | Low-income communities of color in formerly redlined neighborhoods face persistent racial disparities and inequities in pollution exposure, access to transportation and safe streets, and inadequate provisions for health, safety, stable housing, clean air, education, and employment. In the process of attempting to remedy such disparities through major transportation infrastructure and access improvements, residents who are intended to benefit from expanded transportation access and options are often placed at increased risk of harmful displacement, gentrification, and environmental injustice impacts. This research project employs a case study of the International Boulevard Bus Rapid Transit (BRT) project in East Oakland, guided by Community Based Participatory Action Research (CBPAR) principles, to investigate specific traffic safety and racialized displacement impacts from the project and considers potential solutions towards protecting residents and preventing harmful byproducts of major transportation projects. In collaboration with a Community Advisory Council (CAC), a quantitative analysis of collisions along the corridor and demographic changes in select East Oakland neighborhoods was conducted. The results show evidence of increased fatality and injury collisions along the corridor at the start of construction of the BRT and after opening of the service as well as continued trends of gentrification and displacement in many East Oakland neighborhoods along the corridor. It is inconclusive with this research if there is a causal link between the BRT project and exacerbated displacement trends in nearby neighborhoods. Further qualitative research is needed to ground-truth and understand more fully the indirect land and housing market impacts of the BRT project. |
| Keywords: | Engineering, Bus rapid transit, construction, traffic crashes, crash rates, corridors, low income groups, displacement, transportation equity, case studies |
| Date: | 2024–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsrrp:qt4zm0z35z&r= |
| By: | Benoit Aubert; Simon Bourdeau; Thierry Warin; Thibault Sénegas; Jeremy Schneider |
| Abstract: | This study uses available job advertisements to understand organizations' digital skills needs. The study points out that while advanced skills are sometimes required, they are overshadowed by basic competencies, which seem to be lacking and yet necessary for a very large number of jobs. The results highlight that it is also necessary to think beyond the expertise related to digital transformation projects and worry about the skills required to execute these transformed activities. The results show that the most in-demand digital skills are those related to office tools, but there is also a growing demand for more specialized ICT skills. Cette étude utilise les offres d’emplois publiées pour comprendre les besoins des organisations en compétences numériques. L’étude souligne que si les compétences de pointe sont parfois requises, elles sont toutefois éclipsées par les compétences de base, qui semblent manquantes et pourtant nécessaires pour un très grand nombre d’emplois. Les résultats soulignent qu’il faut également penser aux compétences requises au-delà de l’expertise liée aux projets de transformation numérique, pour ensuite assurer la réalisation des activités d’exploitation une fois qu’elles ont été transformées. Les résultats montrent aussi que les compétences numériques les plus recherchées sont celles liées aux outils bureautiques, mais qu’il existe également une demande croissante pour des compétences plus spécialisées en matière de technologies de l’information et de communication. |
| Keywords: | digital skills, jobs, digital transformation, digital literacy, compétences numériques, emplois, transformation numérique, littératie numérique |
| Date: | 2024–05–08 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirpro:2024rp-05&r= |