Emissions trading with rolling horizons
Simon Quemin and
Working Papers from Chaire Economie du climat
We build a model of competitive emissions trading under uncertainty with supply-side control. Firms can use rolling planning horizons to deal with uncertainty and can also exhibit bounded responsiveness to the control. We tailor the model to the EU ETS, calibrate it to 2008-2017 market developments and find that a rolling horizon is able to reconcile the banking dynamics with discount rates implied from futures' yield curves. We evaluate the 2018 market reform, decompose the impacts of its main features and quantify how they hinge on the firms' horizon and responsiveness. We highlight important implications for policy design and evaluation.
Keywords: Emissions trading; Rolling horizons; Bounded rationality; Decision-making under uncertainty; Supply-side control; EU-ETS (search for similar items in EconPapers)
Pages: 47 pages
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
http://www.chaireeconomieduclimat.org/RePEc/cec/wp ... Quemin-Trotignon.pdf First version, 2019 (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cec:wpaper:1901
Access Statistics for this paper
More papers in Working Papers from Chaire Economie du climat
Bibliographic data for series maintained by Chaire Economie du Climat ().