Price and Network Dynamics in the European Carbon Market

Andreas Karpf, Antoine Mandel and Stefano Battiston

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

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; Marché du carbone; réseaux; économie du climat (search for similar items in EconPapers)
Date: 2017-02
New Economics Papers: this item is included in nep-ene, nep-env, nep-mst and nep-net
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01484117
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Published in 2017

Downloads: (external link)
https://shs.hal.science/halshs-01484117/document (application/pdf)

Related works:
Journal Article: Price and network dynamics in the European carbon market (2018)
Working Paper: Price and network dynamics in the European carbon market (2018)
Working Paper: Price and network dynamics in the European carbon market (2018)
Working Paper: Price and network dynamics in the European carbon market (2018)
Working Paper: Price and Network Dynamics in the European Carbon Market (2017)
Working Paper: Price and Network Dynamics in the European Carbon Market (2017)
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:hal:cesptp:halshs-01484117

Access Statistics for this paper

More papers in Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL
Bibliographic data for series maintained by CCSD ().