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Emission Markets In The European Union: Fundamentals And Price Formation Process


  • Erias Rey, Antonio
  • Dopico Castro, Jesús Ángel


The objective of this article is to evaluate the fundamentals of the carbon emission market of European Union Emissions Trading System (EU-ETS) as well as to analyze the price determinants of transferable emissions permits (PET) of the markets. To this end, the main infrastructural components –agent, assets, operations, and organized markets– will be examined alongside the deciding factors in setting the price carbon for diagnostic purposes. This study of price was conducted using, as resource, the value of futures over European Union Allowances (EUA) in the biggest market of the system, the ICE-ECX (Intercontinental Exchange, European Climate Exchange). The most significant conclusions of our research are the stabilization of the value over the last two years, the constant growth of open interest, and the correlation between the EUAs value and energy prices.

Suggested Citation

  • Erias Rey, Antonio & Dopico Castro, Jesús Ángel, 2011. "Emission Markets In The European Union: Fundamentals And Price Formation Process," Revista Galega de Economía, University of Santiago de Compostela. Faculty of Economics and Business., vol. 20(1).
  • Handle: RePEc:sdo:regaec:v:20:y:2011:i:1_3

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