An overview of CO2 cost pass-through to electricity prices in Europe

Boris Solier and Pierre-André Jouvet

Working Papers from Chaire Economie du climat

Abstract: This paper investigates the link between wholesale electricity prices in Europe and the CO2 cost, i.e. the price of European Union Allowances (EUAs), over the two first phases of the European Union Emissions Trading Scheme (EU ETS). We set up a theoretical framework and an empirical model to estimate to what extent daily fluctuations of CO2 costs may have impacted electricity prices. Regarding estimation results for the first phase of the EU ETS, about 42% of estimated pass-through rates appear to be statistically significant, while only one third of them are statistically different from zero in the second phase. We try to improve those results by proposing alternative estimates based on the EU ETS compliance periods.

Keywords: EU ETS; CO2 cost pass-through; Electricity spot markets (search for similar items in EconPapers)
JEL-codes: C22 C58 G1 L94 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2011-06
New Economics Papers: this item is included in nep-ene, nep-env and nep-eur
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.chaireeconomieduclimat.org/RePEc/cec/wp ... vet-Pass_through.pdf First version, 2011 (application/pdf)

Related works:
Journal Article: An overview of CO2 cost pass-through to electricity prices in Europe (2013)
Working Paper: An overview of CO2 cost pass-through to electricity prices in Europe (2013)
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:cec:wpaper:1108

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 ().