Emissions Compliances and Carbon Prices under the EU ETS: A Country Specific Analysis of Industrial Sectors
AbstractThis article critically examines the impact of industrial production for sectors covered by the EU Emissions Trading Scheme (EU ETS) on emissions allowance spot prices during Phase I (2005-2007). We find evidence that the effect of industrial production activity on EU carbon price changes shall be analysed in conjunction with production peaks and compliance net short/long positions. The results extend previous literature by showing that carbon price changes react not only to energy prices forecast errors and extreme temperature events, but also to industrial production in two sectors covered by the EU ETS: combustion and iron. Based on a country-specific analysis, after disentangling the effects of industrial production peaks and CO2 emissions compliance at the EU 24 level, we capture the effects of the variation of industrial production on EU carbon price changes in Germany, Poland, Spain and the UK.
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Bibliographic InfoPaper provided by Paris Dauphine University in its series Economics Papers from University Paris Dauphine with number 123456789/4224.
Date of creation: May 2009
Date of revision:
Publication status: Published in Journal of Policy Modeling, 2009, Vol. 31, no. 3. pp. 446-462.Length: 16 pages
Industrial production; CO2 emissions; Carbon pricing; Emissions Trading; EU ETS;
Other versions of this item:
- Alberola, Emilie & Chevallier, Julien & Chèze, Benoît, 2009. "Emissions Compliances and Carbon Prices under the EU ETS: A Country Specific Analysis of Industrial Sectors," Journal of Policy Modeling, Elsevier, Elsevier, vol. 31(3), pages 446-462, May.
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
- Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
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