Abstract
This study focuses on the European Emission Trade System introduced in 2005, since in contrast to other regulatory instruments it remains relatively untested in its economic effects. Because of the inherent uncertainty of the price for emission allowances (EAs), we first model the demand and supply function. For former this study employs contribution margin accounting and production functions of the available power generation technologies as well as combined heat and power installations in Germany. The resulting demand function for EAs is relatively price inelastic at some points due to spreads in primary energy prices and the existing production capacities of different technologies. Consequently, the quantity of EAs has an extensive influence on the price of EAs and so on different indicators with economic importance.
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Hammer, C., Friedl, G. (2011). Estimating the Short-Term Impact of the European Emission Trade System on the German Energy Sector. In: Hu, B., Morasch, K., Pickl, S., Siegle, M. (eds) Operations Research Proceedings 2010. Operations Research Proceedings. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-20009-0_80
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DOI: https://doi.org/10.1007/978-3-642-20009-0_80
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