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Environmental Risk Management Workshop
Wednesday, September 30, 2010 Chicago, IL
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Given all the embedded risks and uncertainties in the environmental markets (price, policy, counter-party, credit), are there systematic approaches that help justify decisions to retrofit, switch fuel, trade emission credits, invest in offsets, or even to wait and do nothing?
The answer is Yes.
Participants will learn to setup and solve risk mitigation problems using the decision analysis and probabilistic modeling frameworks. They will also study a wide range of modeling tools -such as real option analysis, dynamic programming, options, forwards, swaps- which they can leverage to help hedge/manage environmental risks. By using these building blocks and understanding the risk aversion of their decision makers, participants will be well on their way to begin to formulate and mitigate the risks their corporations are facing.
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Course Agenda
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8:00 am
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9:00 am
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Registration and Breakfast
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9:00 am
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9:15 am
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Introduction and General Welcome
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9:15 am
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10:45 am
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Module I: Decision Analysis Introduction and Example of Risk Management Tools and Methodologies
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10:45 am
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11:00 am
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Break
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11:00 am
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12:00 pm
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Module II: Environmental Risk Management
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12:00 pm
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12:45 pm
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Lunch
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1:00 pm
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2:00 pm
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Module III: Introduction to forwards, swaps and options
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2:00 pm
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4:00 pm
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Module IV: Real option theory and applications
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4:00 pm
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5:00 pm
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Module V: Interactive exercise with tools and methodologies learned from the course
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Course Description
This is a course for compliance planners, finance staff, traders, as well as decision makers who want to familiarize themselves with decision analysis, risk management, and contract pricing applied to environmental markets.
Students will learn the basics of decision analysis, understanding and using corporate risk aversion in decision making, as well as pricing tools and models to evaluate/balance various risks and opportunities in the environmental market.
The morning session will focus on decision analysis, probabilistic modeling of environmental markets, as well as decision making in an uncertain (regulatory) environment. The course will also focus on risk management tools and methodologies, such as efficient frontiers. Sample transactions and exercises will be custom tailored to the emissions compliance field and will provide students with hands-on experience and risk management techniques that can immediately be put to use on the job.
In the afternoon, the course will focus on real options and environmental options pricing models. A special session will be dedicated to pricing models for forwards and swaps. Students will explore available tools and methods to quantify and manage risk including the use of options, swaps, forwards, cross commodity and indexed transactions. Some analytical background would be helpful, but enough patience will see you through the maze of quantitative tools.
At the end of the day, students will apply all the tools they have learned to a series of practical exercises that will cover various aspects of the risk management in environmental market, such as emission compliance, cost optimization, risk reduction and portfolio management.
This course will be taught by experienced Decision Analysis and risk management practitioners. This workshop is a can't miss course for anyone who needs to understand risk management theory and the associated tools and methodologies, especially when applied to environmental markets.
Event Info
October, 23, 2009
9:00am - 5:00pm
Westin Galleria, 5060 Alabama Street, Houston, TX
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