Banking behavior under uncertainty: Evidence from the US Sulfur Dioxide Emissions Allowance Trading Program
AbstractThe aim of this paper is to examine portfolio management of emission allowances in the US Sulfur Dioxide Emissions Allowance Trading Program, to determine whether utilities have a real motive to bank when risk increases. We test a theoretical model linking the motivation of the firm to accumulate permits in order to prepare itself to face a risky situation in the future. Empirical estimation using data for years 2001 to 2004 provides evidence of a relationship between banking behavior and uncertainty the utility is facing with.
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Bibliographic InfoPaper provided by CREDEN (Centre de Recherche en Economie et Droit de l'Energie), Faculty of Economics, University of Montpellier 1 in its series Cahiers du CREDEN (CREDEN Working Papers) with number 06.02.63.
Length: 20 pages
Date of creation: 2006
Date of revision:
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Postal: CREDEN, Faculté d'Economie, Avenue Raymond Dugrand, CS 79606, 34960 MONTPELLIER Cedex 2, France
Phone: 33 (0)4 67 15 83 60
Fax: 33 (0)4 67 15 84 04
Web page: http://www.creden.univ-montp1.fr
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Emissions Trading; Permits Banking; Acid Rain Program Uncertainty; Risk Aversion; Prudence.;
Find related papers by JEL classification:
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
- Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
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- Creti, Anna & Villeneuve, Bertrand, 2008.
"Equilibrium Storage in a Markov Economy,"
11944, University Library of Munich, Germany.
- Villeneuve, Bertrand & Creti, Anna, 2007. "Equilibrium Storage in a Markov Economy," Economics Papers from University Paris Dauphine 123456789/2280, Paris Dauphine University.
- Creti, Anna & Villeneuve, Bertrand, 2010. "Equilibrium Storage in a Markov Economy," MPRA Paper 20520, University Library of Munich, Germany.
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