Is There a Stochastic Trend in European Union Emission Trading Scheme Prices?

Don BREDIN; Cal MUCKLEY

Makale detayları

Is There a Stochastic Trend in European Union Emission Trading Scheme Prices?

Yazarlar:

Don BREDIN | Cal MUCKLEY

Yayıncı:

Sosyoekonomi Society

Dergi:

Sosyoekonomi 2010 Vol.12 Issue 12

Belge Tipi:

Makale

Yayın Tarihi:

8/2010

Belge Dili:

İngilizce

Document ID (Org No.):

2000624600

Sıklık:

Üç Aylık

pISSN:

1305-5577

Özet:

 


The European Union’s Emission Trading Scheme (ETS) is the key policy instrument of the European Commissions Climate Change Program aimed at reducing greenhouse gas emissions to eight percent below 1990 levels by 2012. The key asset traded under the scheme is the European Union Allowance (EUA). To further curtail greenhouse gas emissions the EU Allowance prices should follow a stationary path about a persistent upward trend. In this vein, this article finds evidence to the contrary indicating the presence of a stochastic trend (a unit root) in EU Allowance prices during the period from April 2005 through to July 2009. This finding is indicative of incoherence between the European Union ETS de jure policy, with regard to transiting to a low carbon economy, and EUA price behavior.

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The European Union’s Emission Trading Scheme (ETS) is the key policy instrument of the European Commissions Climate Change Program aimed at reducing greenhouse gas emissions to eight percent below 1990 levels by 2012. The key asset traded under the scheme is the European Union Allowance (EUA). To further curtail greenhouse gas emissions the EU Allowance prices should follow a stationary path about a persistent upward trend. In this vein, this article finds evidence to the contrary indicating the presence of a stochastic trend (a unit root) in EU Allowance prices during the period from April 2005 through to July 2009. This finding is indicative of incoherence between the European Union ETS de jure policy, with regard to transiting to a low carbon economy, and EUA price behavior.

.

Makale detayları

Is There a Stochastic Trend in European Union Emission Trading Scheme Prices?

Yazarlar: Don BREDIN | Cal MUCKLEY

Yayıncı: Sosyoekonomi Society

Dergi: Sosyoekonomi 2010 Vol.12 Issue 12

Belge Tipi: Makale

Yayın Tarihi: 8/2010

Belge Dili: İngilizce

Document ID (Org No.): 2000624600

Sıklık: Üç Aylık

pISSN: 1305-5577

Sayı

Yazarlar:

Don BREDIN | Cal MUCKLEY

Yayıncı:

Sosyoekonomi Society

Dergi:

Sosyoekonomi 2010 Vol.12 Issue 12

Belge Tipi:

Makale

Yayın Tarihi:

8/2010

Belge Dili:

İngilizce

Document ID (Org No.):

2000624600

Sıklık:

Üç Aylık

pISSN:

1305-5577