scholarly journals Coase and Cap-and-Trade: Evidence on the Independence Property from the European Carbon Market

2021 ◽  
Author(s):  
Aleksandar Zaklan
Keyword(s):  
Carbon Market ◽  
Cap And Trade ◽  
Independence Property

scholarly journals Adopt or Innovate: Understanding Technological Responses to Cap-and-Trade

2020 ◽  
Vol 12 (3) ◽  
pp. 170-201
Author(s):  
Raphael Calel
Keyword(s):  
Carbon Emissions ◽  
Pollution Control ◽  
Carbon Market ◽  
Carbon Intensity ◽  
Carbon Markets ◽  
Low Carbon ◽  
Cap And Trade ◽  
Short Term ◽  
Regulated Firms ◽  
Control Technologies

One important motivation for creating cap-and-trade programs for carbon emissions is the expectation that they will stimulate much-needed low-carbon innovation. I construct a new panel of British firms to investigate this hypothesis, finding that the European carbon market has encouraged greater low-carbon patenting and R&D spending among regulated firms without necessarily driving short-term reductions in carbon intensity of output. This stands in contrast to past cap-and-trade programs, which have primarily spurred adoption of existing pollution control technologies, with little effect on innovation. I discuss how to reconcile these contrasting findings and implications for the future of carbon markets. (JEL D22, O32, O34, Q52, Q54, Q58)

scholarly journals California's carbon market and energy prices: a wavelet analysis

2018 ◽  
Vol 376 (2126) ◽  
pp. 20170256 ◽  
Author(s):  
Luís Aguiar-Conraria ◽  
Maria Joana Soares ◽  
Rita Sousa
Keyword(s):  
Wavelet Analysis ◽  
Fossil Fuels ◽  
Carbon Price ◽  
Carbon Market ◽  
Wavelet Coherence ◽  
Gasoline Prices ◽  
Energy Prices ◽  
Cap And Trade ◽  
Significant Measure ◽  
Carbon Prices

Carbon price is a key variable in management and risk decisions in activities related to the burning of fossil fuels. Different major players in this market, such as polluters, regulators and financial actors, have different time horizons. We use innovative multivariate wavelet analysis tools, including partial wavelet coherence and partial wavelet gain, to study the link between carbon prices and final energy prices in the time and frequency dimensions in California's carbon market, officially known as the California cap-and-trade programme. We find that gasoline prices lead an anti-phase relation with carbon prices. This result is very stable at lower frequencies (close to 1-year period cycles), and it is also present before mid-2015 in the 20–34 weeks frequency band. Regarding electricity, we find that at about a 1-year period, a rise in carbon prices is reflected in higher electricity prices. We conclude that the first 5 years of compliance of the California cap-and-trade programme show that emissions trading is a significant measure for climate change mitigation, with visible rising carbon prices. The quantitative financial analytics we present supports the recent decision to extend the current market to 2030 without the need for complementary carbon pricing schemes.This article is part of the theme issue ‘Redundancy rules: the continuous wavelet transform comes of age’.

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