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Carbon Price Drivers: An Updated Literature Review


  • Julien Chevallier

    () (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)


Since the creation of the European Union Emissions Trading Scheme (EU ETS) in 2005, a burgeoning academic literature has emerged to identify the factors that shape the price of carbon, where one European Union Allowance is equal to one ton of CO2-equivalent emitted in the atmosphere. Thus, there is a need for an updated and thorough literature review on the state-ofthe-art on topic that this paper aims to fulfill. Namely, we consider the main econometric studies that have been recently published in the academic literature, which feature the influence of the following determinants to explain the variation of the price of carbon: institutional decisions; energy prices and weather events; macroeconomic and financial market shocks. The paper concludes with some directions for future research in this area.

Suggested Citation

  • Julien Chevallier, 2011. "Carbon Price Drivers: An Updated Literature Review," Working Papers halshs-00586513, HAL.
  • Handle: RePEc:hal:wpaper:halshs-00586513
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    References listed on IDEAS

    1. Luis Araujo & Emanuel Ornelas, 2005. "Trust-Based Trade," IBMEC RJ Economics Discussion Papers 2005-08, Economics Research Group, IBMEC Business School - Rio de Janeiro.
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    Carbon Price; Banking Borrowing; Energy Prices; Macroeconomy; Financial Markets; Econometrics;

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