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Title:Disposition in the carbon market and institutional constraints PDF Logo
Authors:Vinokur, Leon
Issue Date:2009
Series/Report no.:Working Paper // School of Economics and Finance, Queen Mary, University of London 652
Abstract:This paper investigates the impact of banking and submission constraints, set by the EU Emission Trading Scheme, on the efficiency of the carbon permits spot market using intra-daily data. My aim is to identify whether there is a Disposition effect in the spot market. I will examine a data set that includes spot prices for the First and Second Phases of the Scheme from 24 June 2005 to 07 August 2009. I find that the Disposition effect is significantly high at the beginning of each Phase and decreases close to the first compliance event. In the light of these results I propose a lifting of the ban on banking between Phases and an increased emissions information disclosure in order to increase the efficiency of the Scheme.
Subjects:carbon market
psychological biases
institutional constraints
JEL:G11
G18
D84
Q48
Document Type:Working Paper
Appears in Collections:Working Paper Series, School of Economics and Finance, Queen Mary, University of London

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