Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/67350
Authors: 
Rickels, Wilfried
Görlich, Dennis
Oberst, Gerrit
Peterson, Sonja
Year of Publication: 
2012
Series/Report no.: 
Kiel Working Paper 1804
Abstract: 
In this paper we empirically investigate potential determinants of allowance (EUA) price dynamics in the European Union Emission Trading Scheme (EU ETS) during Phase II. In contrast to previous papers, we analyze a significantly longer time series, place particular emphasis on the importance of price variable selection, and include an extensive data of renewable energy feed-in in Europe. We show (i) that results are extremely sensitive to choosing different price series of potential determinants, such as coal and gas prices, (ii) that EUA price dynamics are only marginally influenced by renewable energy provision in Europe, and iii) that EUA prices currently do not reflect marginal abatement costs across Europe. We conclude that the expectation of a more mature allowance market in Phase II cannot be confirmed.
Subjects: 
Carbon emission trading
EU ETS
Carbon price influence factors
Fuel switching
JEL: 
C22
G14
Q54
Document Type: 
Working Paper

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