Workshop Series: Naomi Soderstrom
Abstract: This paper sets the stage for a continuing investigation of capital budgeting analyses of projects under the auspices of the United Nations' Clean Development Mechanism (CDM) Program. These environmental projects are primarily hosted in developing countries and result in issuance of carbon emissions permits (Certified Emission Reductions) that can be used as offsets to satisfy carbon emission limitations in the European Union. We examine a sample of projects that have at least one publicly traded participant. We find that some of the financial analyses contain items which downwardly bias the value of the project. This is consistent with incentives for applicants to submit projects where the financial viability is dependent on the value of the granted emissions permits. Future analyses will examine cross-sectional characteristics of the biases in cash flows and relate the CDM projects to stock market performance.
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Dr Soderstrom received her PhD in Accounting and Information Systems from Northwestern University in 1990. Her primary research areas are managerial accounting and environmental accounting. Dr. Soderstrom’s work has appeared in major journals including Journal of Accounting and Economics, Journal of Accounting Research, The Accounting Review, Journal of the American Medical Association, Review of Accounting Studies, Journal of Management Accounting Research, Journal of Accounting, Auditing, and Finance, and Journal of Accounting and Public Policy in the U.S. and Accounting Organizations and Society and European Accounting Review in Europe. She is on the editorial boards of four journals. Dr. Soderstrom is currently a Visiting Professor at the University of Melbourne. Prior to joining the University of Colorado, she taught at the University of Washington. In addition to her position at the University of Colorado, she is Adjunct Professor at Instituto de Empresa (Madrid, Spain) and University of Mannheim (Mannheim, Germany).