We examine the pattern of allowance trades in European Union Emissions Trading System (EU ETS) using highly disaggregated trading data and identify a significant robust home market bias. Our results point to informational transactions costs that increase when across national borders. The existing trade goods services explains two thirds bias, with remainder due other causes. finding suggests fi...

In this paper we propose a market consistent futures price dynamics model for cap-andtrade schemes, designed in the spirit of the European Union’s Emissions Trading Scheme (EU ETS). Historical price dynamics for the EU ETS suggest that, both, European emission Allowances (EUAs) and Certified Emission Reductions (CERs), certificates, which are generated through the Clean Development Mechanism (C...

This paper is concerned with the mathematical analysis of emissions markets. We review the existing quantitative analyses on the subject and introduce some of the mathematical challenges posed by the implementation of the new phase of the European Union Emissions Trading Scheme as well as the cap-and-trade schemes touted by the US, Canada, Australia and Japan. From a practical point of view, th...

Global climate change has encouraged international and regional adoption of pollution taxes and carbon emission reduction policies. Europe has taken the leadership in environmental regulations by introducing the European Union Emissions Trading System (EU-ETS) in 2005 and by developing and promoting a set of policies destined to lower carbon emissions from transport sectors. These environmental...

The aim of this report is to review the possible ways to reduce carbon emissions from the transport sector through the application of an emissions trading scheme and make recommendations regarding the most appropriate methods and timeframes for implementation of such schemes. The main elements of emissions trading schemes are introduced, including the establishment of an emissions target, metho...

A number of previous studies have considered the effect of the EU Emissions Trading Scheme (EU ETS) on the competitiveness of energy-intensive industrial sectors. These studies typically make theoretical predictions about product pricing, and of the profitability of European firms whose CO 2 emissions are capped, or firms which are intensive electricity users. This paper adds to the literature ...

Recent years have seen an expansion of carbon markets around the world as various policymakers attempt to reduce CO2 emissions. This paper considers two of the major types of carbon permits: European Union Allowances (EUAs, arising from the European Union Emissions Trading Scheme, EU ETS) and certified emissions reductions (CERs, arising from agreements made under the Kyoto Protocol). The rules...

The European Union (EU) has been a frontrunner in curbing greenhouse gas emissions, having established 2005 the Emission Trading System (ETS) and adopted July 2021 proposal for Carbon Border Adjustment Mechanism (CBAM). This essay explains how design of EU CBAM complies with World Trade Organization (WTO) rules, particular principle non-discrimination. It then discusses can cooperate other coun...

Since the creation of the European Union Emissions Trading Scheme (EU ETS) in 2005, a burgeoning academic literature has emerged to identify the factors that shape the price of carbon, where one European Union Allowance is equal to one ton of CO2-equivalent emitted in the atmosphere. Thus, there is a need for an updated and thorough literature review on the state-of-the-art on topic that this p...


 This paper analyzes the international climate protection instrument Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), which is based on Civil Organization (ICAO) Assembly No. A39-3, its relation to European Union Emissions Trading System (EU-ETS) in aviation, Directive 2008/101/EC. It still unclear whether or what extent already existing EU-ETS aviation can cont...