The ‘tyranny of discounting’ in economic efficiency evaluation of capital investment projects susceptible to ecological and climatic changes

In this article, we consider the question of barriers to increasing investment activity in the Boreal and Arctic regions of Siberia, taking into account the factors of ecological and climatic changes. We investigate the current tendencies of large Russian companies in financing environmental policy measures. This is studied mainly in the dynamic of the ratio of ‘current expenditures to investments’ for environmental protection. It is essential to change the financial preference of remedying environmental damage to one of preventing environmental damage by improving warning technology and conducting research and development. Solving this problem is only possible by dictating a standard discounting procedure based on correcting discount rates, periods of cash flow analysis and regulations of Russian accounting standards regarding expenditures on natural resource development.     

Corrigendum to “A model to control environmental performance of project execution process based on greenhouse gas emissions using earned value management” [Int. J. Proj. Manag. 36 (3) (April 2018) 397-413]

Abstract was revised as follows:In response to recent climate change, which is believed to be attributed to the release of greenhouse gas (GHG) emissions, many countries are placing CO₂ abatement programs such as carbon tax and cap-and-trade. Projects do have a significant share in GHGs and therefore their environmental performance, like their schedule and cost performance, should be monitored and controlled. Although many large projects would pass an environmental assessment in the project evaluation phase, the issue of environmental performance monitoring during the project execution phase has not been addressed in project management methodologies. The objective of this paper is to develop a model to estimate project GHG emissions, and to measure project GHG performance using the developed metrics, which can be used at any point in time over the life of a project. A comprehensive study is conducted to collect information on GHG emission factors of various project activity data (such as material use, energy and fuel consumption, transportation, etc.), and a user form interface is developed to calculate the total GHG of an activity. Also, a breakdown structure is proposed which supports managing all the project GHG accounts. The monitoring and control model is formulated based on the logic used in earned value management (EVM) methodology. The proposed model is then implemented to a work package of a real construction project. The results present the project initial GHG plan and show that the model is able to calculate project GHG variance by the reporting date and predict project final GHG based on a project GHG performance index. The method presented in this paper is general and can be applied to any type of projects in an organization that aims to reduce its carbon footprint. The same structure can be applied to monitor and control any other environmental impact associated with project execution process.