| ID | 150680 |
| Title Proper | Variance risk premia in CO2 markets |
| Other Title Information | a political perspective |
| Language | ENG |
| Author | Reckling, Dennis |
| Summary / Abstract (Note) | The European Commission discusses the change of free allocation plans to guarantee a stable market equilibrium. Selling over-allocated contracts effectively depreciates prices and negates the effect intended by the regulator to establish a stable price mechanism for CO2 assets. Our paper investigates mispricing and allocation issues by quantitatively analyzing variance risk premia of CO2 markets over the course of changing regimes (Phase I-III) for three different assets (European Union Allowances, Certified Emissions Reductions and European Reduction Units). The research paper gives recommendations to regulatory bodies in order to most effectively cap the overall carbon dioxide emissions. |
| `In' analytical Note | Energy Policy Vol. 94, No.94; Jul 2016: p.345–354 |
| Journal Source | Energy Policy 2016-07 94, 94 |
| Key Words | Kyoto Protocol ; Emission Reduction ; ETS ; Carbon Price ; Cap-and-Trade ; Variance Risk Premia ; Price Collar |