THE EUROPEAN EMISSION TRADING SCHEME: IMPLICATIONS FOR LONG-TERM INVESTMENT VALUATION

Luis M. Abadie () and Ibon Galarraga
Additional contact information
Luis M. Abadie: Basque Centre for Climate Change (BC3)/Alameda, Urquijo 4,4a-1a, 48008 Bilbao, Spain

Climate Change Economics (CCE), 2011, vol. 02, issue 02, 129-148

Abstract: As the EU Emission Trading Scheme (EU ETS) moves towards its third phase (2013–2020) it has undergone numerous improvements, including a gradual increase in the use of auctions as a distribution mechanism and the prevalence of sectoral criteria over National Allocation Plans. At the same time, emission allowances with maturities up to December 2020 have begun to be traded on the futures markets, reflecting the impact that the new measures are expected to have on prices. This paper sets out to obtain a financial valuation of the impact and analyze whether the resulting prices will facilitate investment in installations to bring about reductions in emissions. The effect on investments of the potential introduction of caps and floors on emission trading prices is also studied.

Keywords: European Trading Scheme (EU ETS); price of carbon; GHG abatement (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S2010007811000243
Access to full text is restricted to subscribers

Related works:
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:wsi:ccexxx:v:02:y:2011:i:02:n:s2010007811000243

Ordering information: This journal article can be ordered from

DOI: 10.1142/S2010007811000243

Access Statistics for this article

Climate Change Economics (CCE) is currently edited by Robert Mendelsohn

More articles in Climate Change Economics (CCE) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().