Firm Trading Behaviour and Transaction Costs in the European Union’s Emission Trading System: An Empirical Assessment

Jūratė Jaraite-Kažukauskė and Andrius Kazukauskas

No 2012:9, CERE Working Papers from CERE - the Center for Environmental and Resource Economics

Abstract: To the best of our knowledge, this study is one of the first to empirically analyse the trading behaviour of all ETS firms during the first phase of the EU’s Emissions Trading System. We use a unique dataset which allows investigating the importance of permit trading transaction costs, such as information costs and search costs. This paper shows that transaction costs can play an important role in the initial years of the programme. These costs are significant in explaining why a number of ETS firms did not sell their unused allowances on the market. This study also supports the concerns that transaction costs might be excessive for smaller participants.

Keywords: emission trading; Europe; firm level data; transaction costs (search for similar items in EconPapers)
JEL-codes: Q52 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2012-03-01
New Economics Papers: this item is included in nep-ene, nep-env and nep-eur
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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