The Economic Geography of European Carbon Market Trading
AbstractThe European Union Emissions Trading Scheme (EU ETS) is the worldÃ¢â‚¬â„¢s first regional 10 carbon trading market. This article is a quantitative attempt to examine the temporal and spatial geography of European carbon trading. We show that carbon markets are especially sensitive to two factors: staging across time (Phase I versus II of the EU ETS) and across space (energy market structures in Europe). Carbon markets serve as a vehicle to better understand the economic geography of financial markets. Building on the theoretical vocabulary of the geography of finance, the article suggests that certain national factors (market structure) and institutional factors (regulatory phases) better explain how carbon markets operate than company level differences. These findings indicate that geographers have a key role to play in highlighting the local ramifications of carbon markets if and when the world moves towards its ambition for a global carbon market.
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Bibliographic InfoPaper provided by Centre for Climate Economics & Policy, Crawford School of Public Policy, The Australian National University in its series CCEP Working Papers with number 0510.
Date of creation: Oct 2010
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Climate change; tradable permits; European Union;
Find related papers by JEL classification:
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-12-11 (All new papers)
- NEP-ENE-2010-12-11 (Energy Economics)
- NEP-ENV-2010-12-11 (Environmental Economics)
- NEP-EUR-2010-12-11 (Microeconomic European Issues)
- NEP-RES-2010-12-11 (Resource Economics)
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