EconPapers    
Economics at your fingertips  
 

Price and Network Dynamics in the European Carbon Market

Andreas Karpf (), Antoine Mandel () and Stefano Battiston ()
Additional contact information
Stefano Battiston: Department of Banking and Finance - University of Zürich

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

Abstract: This paper presents an analysis of the European Emission Trading System as a transaction network. It is shown that, given the lack of a centralized market place, 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. To empirically relate networks statistics to market outcomes a PLS-PM modeling technique is introduced. It is shown that the asymmetries in the network induced market inefficiencies (e.g. increased bid-ask spread). 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: carbon market; network; climate economics (search for similar items in EconPapers)
JEL-codes: L14 D85 Q56 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene, nep-env, nep-mst, nep-ore and nep-res
Date: 2017-02
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
ftp://mse.univ-paris1.fr/pub/mse/CES2017/17010.pdf (application/pdf)

Related works:
Journal Article: Price and network dynamics in the European carbon market (2018) Downloads
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
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:mse:cesdoc:17010

Access Statistics for this paper

More papers in Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne Contact information at EDIRC.
Bibliographic data for series maintained by Lucie Label ().

 
Page updated 2019-11-14
Handle: RePEc:mse:cesdoc:17010