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Zachmann, Georg
von Hirschhausen, Christian R.
Year of Publication: 
Series/Report no.: 
DIW Discussion Papers 708
This paper applies the literature on asymmetric price transmission to the emerging commodity market for EU emissions allowances (EUA). We utilize an error correction model and an autoregressive distributed lag model to measure the relationship between CO2 price changes and the development of wholesale electricity prices. Using data from the German market for electricity and EUAs, we find that the rising prices of EUAs have a stronger impact on wholesale electricity prices than falling prices
the first empirical evidence of asymmetric cost passthrough for these new allowances.
Document Type: 
Working Paper

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