EconPapers    
Economics at your fingertips  
 

Price and network dynamics in the European carbon market

Andreas Karpf, Antoine Mandel and Stefano Battiston

Journal of Economic Behavior & Organization, 2018, vol. 153, issue C, 103-122

Abstract: This paper presents an analysis of the European Emission Trading System as a transaction network. It is shown that, given the lack of well-identified trading institutions, industrial actors had to resort to local connections and financial intermediaries to participate in the market. This gave rise to a hierarchical structure in the transaction network. It is then shown that the asymmetries in the network induced market inefficiencies (e.g., increased bid-ask spread) and informational asymmetries, that have been exploited by central agents at the expense of less central ones. Albeit the efficiency of the market has improved from the beginning of Phase II, the asymmetry persists, imposing unnecessary additional costs on agents and reducing the effectiveness of the market as a mitigation instrument.

Keywords: Network; Carbon market; Climate change; Microstructure (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167268118301720
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Price and network dynamics in the European carbon market (2018) Downloads
Working Paper: Price and Network Dynamics in the European Carbon Market (2017) Downloads
Working Paper: Price and Network Dynamics in the European Carbon Market (2017) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:153:y:2018:i:c:p:103-122

Access Statistics for this article

Journal of Economic Behavior & Organization is currently edited by Neilson, William Stuart

More articles in Journal of Economic Behavior & Organization from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-03-26
Handle: RePEc:eee:jeborg:v:153:y:2018:i:c:p:103-122