Emissions trading with changing future commitments — some initial thoughts

Marcus Stronzik ()
Additional contact information
Marcus Stronzik: Scientific Institute for Infrastructure and Communications Services (WIK)

A chapter in Emissions Trading and Business, 2006, pp 177-186 from Springer

Abstract: Abstract In climate policy a shift from traditional command and control regulations to more market-oriented approaches such as emissions trading can be observed. Concerning the European context, the Directive for a European-wide emissions trading regime that started in 2005 is currently one of the major topics in European climate policy debates. We used contingent claims analysis in order to shed some light on the investment behaviour of companies covered by the EU Directive. Two different approaches to design an allocation free of charge were looked at: grandfathering without updating the base year and a rolling base year. It is shown that in the first case a considerable option value exists, whereas in the second case the option will more or less expire worthless.

Keywords: Climate policy; emissions trading; investment behaviour; real options; allocation (search for similar items in EconPapers)
Date: 2006
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:spr:sprchp:978-3-7908-1748-5_13

Ordering information: This item can be ordered from
http://www.springer.com/9783790817485

DOI: 10.1007/3-7908-1748-1_13

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().