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Carbon Value Analysis Tool (CVAT)
Calculate carbon dioxide emissions reductions into energy-related investment decisions.
Carbon Value Analysis Tool (CVAT) is a screening tool to help companies integrate the value of carbon dioxide emissions reductions into energy-related investment decisions. The tool has two main purposes:
CVAT ranks projects so managers can prioritize them according to their implicit cost per tonne of carbon emission reduction.
- Test the sensitivity of a project's internal rate of return (IRR) to "carbon value" (the value of GHG emissions reductions). CVAT integrates this value into traditional financial analysis by ascribing a market price, either actual or projected, to carbon emissions reductions.
- Facilitate the development of emissions reduction strategies by developing a Marginal Abatement Cost Curve (MACC) across a portfolio of projects.
CVAT estimates direct and indirect emissions reductions using standards developed by the GHG Protocol Initiative (www.ghgprotocol.org). CVAT can also run a Monte Carlo analysis for key project variables such as carbon value, providing insights into the possible range of a project’s IRR.
Carbon Value Analysis Tool
Edited by Carolyn Allen