The European Carbon Market (2005-2007): Banking, Pricing and Risk-Hedging Strategies
AbstractAt the stage of international post-Kyoto negotiations, the adoption of ambitious public policies raises an increasing interest, as society has a whole is more concerned by the scale of damages and the potential irreversibility linked to climate change. The introduction of a tradable permits market in Europe on January 1, 2005, in order to provide incentives to Member-States to take early abatement measures, may be seen as a decisive first step towards that direction. The creation of the EU ETS has indeed revealed the key role played by the European Union in the preservation of the global public good that constitutes the climate. This article reviews the market rules of the European carbon market during 2005-2007. More particularly, it synthesizes theoretical and empirical analyses of banking and borrowing provisions, price drivers and risk-hedging strategies attached to tradable quotas, which were introduced to cover the CO2 emissions of around 10,600 installations in Europe.
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Bibliographic InfoPaper provided by Paris Dauphine University in its series Economics Papers from University Paris Dauphine with number 123456789/6789.
Date of creation: Sep 2011
Date of revision:
Publication status: Published in Handbook of Sustainable Energy, . pp. 395-414.Length: 19 pages
banking; carbon market; EU ETS; tradable permits market;
Other versions of this item:
- Julien Chevallier, 2010. "The European carbon market (2005-2007): banking, pricing and risk-hedging strategies," Working Papers halshs-00458787, HAL.
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
- Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
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