Open Access
EU emissions trading by energy firms
Loading...
Files
RSCAS_2014_99.pdf (1.1 MB)
Full-text in Open Access
License
Access Rights
Cadmus Permanent Link
Full-text via DOI
ISBN
ISSN
1028-3625
Issue Date
Type of Publication
LC Subject Heading
Other Topic(s)
EUI Research Cluster(s)
Initial version
Published version
Succeeding version
Preceding version
Published version part
Earlier different version
Initial format
Author(s)
Citation
EUI RSCAS; 2014/99; Climate Policy Research Unit; [Florence School of Regulation]; [Climate]
Cite
JONG, Thijs, ZEITLBERGER, Alexander, EU emissions trading by energy firms, EUI RSCAS, 2014/99, Climate Policy Research Unit, [Florence School of Regulation], [Climate] - https://hdl.handle.net/1814/32938
Abstract
This paper aims to identify what determines the allowance transactions of energy firms on the European carbon market (EU ETS). We develop measures of their 'autarky' regarding the carbon market, their allowance hedging, and the allowance holdings which ensure optimal EU ETS compliance. Although under-allocated over Phase I, energy firms held more allowances than needed. By selling allowances, only the non-autarkic firms followed their optimal compliance holdings and, hence, actually behaved autarkical. Autarkic firms, conversely, purchased more allowances than they needed. Moreover, and unlike non-autarkic firms, their allowance trades were responsive to energy demand and indicative of carbon hedging. Finally, all energy firms utilized the carbon market's abatement potential, which affirms that the EU ETS leads to relative cost savings. As especially autarkic energy firms utilized this potential, and may have reaped additional savings from their active hedging, they behaved least autarkical regarding the carbon market.