Price Interaction in State Level Renewable Energy Credit Trading Programs

Kyle E. Binder, James W. Mjelde and Richard Woodward

No 205644, 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California from Agricultural and Applied Economics Association

Abstract: Using a Vector Error Correction Model approach, relationships between REC, SREC, electricity, and natural gas prices in Massachusetts and Connecticut are estimated. Confirming previous studies, the results show that REC prices respond negatively to a shock in electricity prices. Additionally, SREC prices are determined mostly by forces outside of the estimated system. Preliminary evidence is found that REC markets across states are related, but that the markets are fragmented, possibly with high transaction costs. Further analysis is required to clarify some of the results which are currently difficult to understand.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 30
Date: 2015
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea15:205644

DOI: 10.22004/ag.econ.205644

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