Allowance Price Drivers in the First Phase of the EU ETS

This file is part of IDEAS, which uses RePEc data

Allowance Price Drivers in the First Phase of the EU ETS

Author Info

Beat Hintermann () (Center for Energy Policy and Economics CEPE, Department of Management, Technology and Economics, ETH Zurich, Switzerland)

Additional information is available for the following registered author(s):

Beat Hintermann

Abstract

In the first phase of the EU Emissions Trading Scheme (EU ETS), the price per ton of CO2 rose to over €30 before decreasing to zero by mid 2007. I examine to what extent this variation can be explained by marginal abatement costs by deriving a structural model of the allowance price under the assumption of efficient markets. I then gradually relax the model by allowing for delayed adjustment of price to fundamentals, as well as by introducing lagged LHS variables. The pattern of the results suggests that prices were not initially driven by marginal abatement costs, but that this inefficiency was largely corrected by the first round of emission verifications.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

Publisher Info
Paper provided by CEPE Center for Energy Policy and Economics, ETH Zürich in its series CEPE Working paper series with number 09-63.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 39 pages
Date of creation: May 2009
Date of revision:
Handle: RePEc:cee:wpcepe:09-63

Contact details of provider:
Postal: ETH-CEPE, Z�richbergstrasse 18, 8032 Z�rich
Phone: +41-1-632 06 50
Fax: +41-1-632 16 22
Web page: http://www.cepe.ethz.ch
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (Carlos Ordás Criado).

Find related papers by JEL classification:
D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
G12 - Financial Economics - - General Financial Markets - - - Asset Pricing
G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies
Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Costs; Distributional Effects; Employment Effects
Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters

This paper has been announced in the following NEP Reports:

NEP-ALL-2009-10-24 (All new papers)
NEP-EEC-2009-10-24 (European Economics)
NEP-ENE-2009-10-24 (Energy Economics)
NEP-ENV-2009-10-24 (Environmental Economics)

Statistics

Access and download statistics

Did you know? You can create your own reading lists on IDEAS.

This page was last updated on 2009-12-8.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.