The EU has established the world’s first cross-border emission-trading systems (ETS) for greenhouse gas (GHG) emissions, currently covering aviation, emission-intensive sectors, and electricity (EITE). Commission offered to apply emissions trading in new sectors where from maritime transport will be incorporated into current ETS, while a separated system cover road building sector. This p...

The existence of some 2 billion unused EU Allowances (EUAs) at the end of Phase II of the EU’s Emissions Trading System (EU ETS) has sparked considerable debate about structural shortcomings of the EU ETS. However, there has been a surprising lack of interest in considering the accumulation of EUAs in light of the theory of intertemporal permit trading, i.e. allowance banking. In this paper we ...

We present a novel approach to the pricing of financial instruments in emission markets— for example, the European Union Emissions Trading Scheme (EU ETS). The proposed structural model is positioned between existing complex full equilibrium models and pure reduced-form models. Using an exogenously specified demand for a polluting good, it gives a causal explanation for the accumulation of CO2 ...

The paper deals with the analysis of informational efficiency of the European emissions trading scheme (EU ETS) with the goal of stating whether or not the system has been able to achieve its proclaimed cost-efficiency within the first two trading periods. The efficient market hypothesis suggests that profiting from predicting price behaviour is difficult as the market price should incorporate ...

The exploration of the dependency structure Chinese and EU carbon trading markets is crucial to construction a globally harmonized market. In this paper, we studied characteristics structural interdependency between China’s major European Union (EU) market before after launch national emissions scheme (ETS) occurrence new coronavirus (COVID-19) by applying C-vine copula method, with prices EU, ...

The main consequence of the launch, in 2005, of the European Union Emission Trading Scheme (EU ETS) has been the establishment of a price for carbon emissions. Thus, major energy producers in Europe are now aware of the impact of their polluting activities. The interest in analysing the carbon markets from a financial point of view has exponentially increased since the launch of the EU ETS. How...

This paper draws on two sources of motivation: (1) The European Union Emission Trading Scheme (EU-ETS) aims at limiting the overall emissions of greenhouse gases. The optimal abatement strategy of companies for the use of emission permits can be described as the viscosity solution of a Hamilton-Jacobi-Bellman (HJB) equation. It is a question of general interest, how regulatory constraints can b...

In one of the central scenarios for meeting an European Union-wide net zero greenhouse gas (GHG) emissions target by 2050, cap in Union Emissions Trading System (EU ETS) becomes negative. Despite this ambition, no mechanism allows inclusion CO 2 removal credits (CRCs) EU ETS to date. Amending legislation is required create enabling conditions a negative cap. Here, we conceptually discuss variou...

This study explores whether the European Union’s CO2 Emissions Trading Scheme (EU ETS) could provide incentives for the public power plants responsible for about one third of EU-27 CO2 emissions, to improve their environmental and productive performance. The existing ex post literature only partially addresses this issue productive performance is measured partially, or environmental performance...

To reduce GHG emissions, the 27 European Union Member States committed themselves in 2007 to reduce emissions from 1990 levels by 20% by 2020. In January 2008, the EU Commission gave the first country-specific proposals to reduce emissions in sectors outside the EU emission trading system (non-ETS). In this study, we looked at several ways of sharing emission reductions in the non-ETS sector. W...