scholarly journals Explaining European Emission Allowance Price Dynamics: Evidence from Phase II

2015 ◽  
Vol 16 (2) ◽  
pp. 181-202 ◽  
Author(s):  
Wilfried Rickels ◽  
Dennis Görlich ◽  
Sonja Peterson
Keyword(s):  
Phase Ii ◽  
Emission Trading ◽  
Price Dynamics ◽  
The European Union ◽  
Fuel Price ◽  
Fuel Switching ◽  
Price Series ◽  
Marginal Abatement Costs ◽  
Long Run ◽  
Trading Scheme

Abstract We empirically investigate potential determinants of the allowance price dynamics in the European Union Emission Trading Scheme during Phase II. In contrast to previous studies, we place particular emphasis on the fuel price selection. We show that results are extremely sensitive to choosing different price series of potential determinants, such as coal and gas prices. In general, only the influence of economic activity in Europe and hydropower provision in Norway is robustly explaining allowance price dynamics. The influence of fuel switching on allowance prices and, therefore, equalization of marginal abatement costs - in particular in the long run - is still rather small.

Tail Dependence Structure between Carbon Emission Allowances Returns Based on Copulas

2013 ◽  
Vol 397-400 ◽  
pp. 726-730 ◽  
Author(s):  
De Dong Zhuang
Keyword(s):  
Phase Ii ◽  
Generalized Pareto Distribution ◽  
Emission Trading ◽  
Tail Dependence ◽  
Dependence Structure ◽  
The European Union ◽  
Copula Functions ◽  
European Climate ◽  
Copula Approach ◽  
Trading Scheme

This paper has focus on analyzing tail dependence structure between EUA spots returns and futures returns based on copula approach, which EUA spots negotiated on BlueNext and futures negotiated on European Climate Exchange within the European Union Emission Trading Scheme (EU ETS) during the Phase II. According to the generalized Pareto distribution (GPD) and different Copula functions, the research shows that Gumbel Copula based on the GPD marginal distribution can indicate the tail dependence structure of EUA spots returns and futures returns accurately, i.e. the dependence between upper-tails of EUA spot and Dec10 is stronger than that of lower-tails of them. In other words, EUA spots and futures are more likely to soar together than slump together during the Phase II.

BETWEEN SPLENDID ISOLATION AND TENTATIVE IMPERIALISM: THE EU'S EXTENSION OF ITS EMISSION TRADING SCHEME TO INTERNATIONAL AVIATION AND THE ECJ'S JUDGMENT IN THE ATA CASE

2012 ◽  
Vol 61 (4) ◽  
pp. 977-991 ◽  
Author(s):  
Andrea Gattini
Keyword(s):  
Emission Trading ◽  
Leadership Role ◽  
Emission Trading Scheme ◽  
The European Union ◽  
Industrial Sectors ◽  
Strategic Issue ◽  
Trading Scheme ◽  
Splendid Isolation ◽  
The Eu ◽  
Energy Package

For the last 15 years the European Union (EU) has been particularly active, both internally and internationally, in the fight against global warming, and it is determined to continue to play a global leadership role in this strategic issue. Among the various market-based measures decided upon, the Emission Trading Scheme (ETS) for energy-intensive industrial sectors has been rightly described as the ‘flagship of the EU climate policy’.1 Even before proceeding to a general overhauling of Directive 2003/87 in the framework of the 2009 Climate and Energy package, the EU had decided to modify the Directive by including aviation activities in the ETS. Directive 2008/1012 provides that all flights from whichever aircraft operator taking off from or landing in the EU territory will be subjected to the ETS from 1 January 2012. For the year 2012 97 per cent of all emissions allowances will be freely assigned, from 2013 the amount will decrease to 95 per cent, whereas 15 per cent of all allowances will be auctioned. In reality the percentage of free allowances is much lower, about 60 per cent, because it takes as parameter the historical aviation emissions of the years 2004–06, when the air traffic was 40 per cent lower than it is now. The idea underlying the Directive is that aircraft operators will either purchase the necessary allowances in the market or will try to reduce their emissions by using bio-fuels (or else reducing the number of flights), with the second option becoming more economically attractive over time.

Climate Protection Law in the European Union—Emergence of a New Regulatory System

2012 ◽  
Vol 9 (1) ◽  
pp. 5-33 ◽  
Author(s):  
Astrid Epiney
Keyword(s):  
European Union ◽  
Central Element ◽  
Emission Trading ◽  
Regulatory System ◽  
Emission Trading Scheme ◽  
Climate Protection ◽  
The European Union ◽  
Legal Questions ◽  
Trading Scheme ◽  
The Eu

“Climate Protection Law” has been developed during the last approximately 15 years on an international, supranational and regional level. In the European Union the trading scheme of greenhouse gas allowances—introduced by Directive 2003/87—is to be considered a central element of the European Union’s climate protection policy. Despite of the creation of the EU emission trading scheme already in 2003 the scheme raises a range of legal questions which have not been really clarified yet. Against this background, the following contribution will discuss—on the basis of a summary of the legal bases and the development of emission trading in the EU—some selected legal questions concerning design, interpretation and application of the Directive 2003/87. Additionally, the question of whether the emission trading scheme as provided by Directive 2003/87 could serve as a model for air protection respectively emission reduction of other air pollutants and / or as a model for a trans-regional or even global emission trading scheme will be discussed.

EU Emission Trading: Starting with Carbon Dioxide

2003 ◽  
Vol 14 (4) ◽  
pp. 397-406 ◽  
Author(s):  
Morten Vesterdal ◽  
Gert Tinggaard Svendsen
Keyword(s):  
Carbon Dioxide ◽  
Greenhouse Gases ◽  
Emission Trading ◽  
Learning By Doing ◽  
Emission Trading Scheme ◽  
The European Union ◽  
Target Level ◽  
Future Developments ◽  
Trading Scheme ◽  
The Eu

The Commission of the European Union wants to start a limited emission trading scheme by 2005 within the Community to enable “learning-by-doing” prior to the Kyoto Protocol. This is to accomplish the desired 8% target level for six different greenhouse gases. However, in the EU it is not clear whether all the six relevant greenhouse gases or only CO2 should be traded. What is the simplest and most practicable solution? We argue in favour of the latter option for three main reasons: the possible dominating global warming potential of CO2, expected future developments in CO2 emissions and the fact, that CO2 is the pollutant most easily monitored.

scholarly journals Price dynamics of cryptocurrencies in parallel markets: evidence from Bitcoin exchanges in Brazil

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Daniel Modenesi de Andrade ◽  
Fernando Barros Jr ◽  
Fabio Yoshio Motoki ◽  
Matheus Oliveira da Silva
Keyword(s):  
Price Discovery ◽  
Emerging Economy ◽  
Price Dynamics ◽  
Price Variation ◽  
Content Type ◽  
Price Series ◽  
Arbitrage Opportunities ◽  
Long Run ◽  
Cointegration Tests ◽  
Short Run

Purpose This paper aims to study the dynamics of bitcoin prices in Brazil, a large emerging economy with an unregulated bitcoin market. Design/methodology/approach First, this study tests if the Law of One Price (LOOP) is valid for bitcoin prices in Brazil, conducting tests with data from three Brazilian exchanges. Next, this study documents bitcoin price dynamics in the short run by studying the price discovery mechanism in these exchanges. This study uses Information Share and Component Share, combining the two measures to obtain an Information Leadership Share (ILS) measure. Findings This study finds a common trend within bitcoin prices among a set of exchanges, with cointegration tests between the price series indicating that LOOP is valid in Brazilian markets in the long run. ILS indicated that, for closing prices, the most liquid exchange (Foxbit) leads discovery, whereas the least liquid (Local Bitcoin) lags, with Mercado Bitcoin in the middle both in terms of discovery and liquidity. Finally, this study provides evidence that the price variation in the market that leads price discovery can be used to construct an arbitrage in another exchange. Originality/value This research brings the first evidence of a price discovery mechanism for exchanges in Brazilian Reais. Although LOOP is valid in the long run, price leadership in bitcoin markets potentially create arbitrage opportunities in the short run. This study contributes to the growing literature of bitcoin prices with novel evidence from a large emerging economy.

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