The European Commission and EUA Prices: A High-Frequency Analysis of the EC's Decisions on Second NAPs

11 Pages Posted: 12 Feb 2009 Last revised: 21 Sep 2009

See all articles by Waldemar Rotfuss

Waldemar Rotfuss

ZEW – Leibniz Centre for European Economic Research

Christian Conrad

Heidelberg University - Alfred Weber Institute for Economics; ETH Zürich - KOF Swiss Economic Institute

Daniel Rittler

Heidelberg University - Alfred Weber Institute for Economics

Date Written: September 15, 2009

Abstract

This paper empirically examines price formation in the European Union Emissions Trading Scheme (EU ETS). Our analysis shows that unexpected allocations of European Union Allowances (EUAs) lead to pronounced price reactions of the expected signs. Moreover, we find evidence that the adjustment of EUA prices to the European Commission’s decisions on second National Allocation Plans (NAPs) is not instantaneous, but takes up to six hours after the decision announcement.

Keywords: EU ETS, Price Formation, European Union Allowance (EUA), European Commission

JEL Classification: G13, G14, G15, G17, G19, Q4, Q5

Suggested Citation

Rotfuss, Waldemar and Conrad, Christian and Rittler, Daniel, The European Commission and EUA Prices: A High-Frequency Analysis of the EC's Decisions on Second NAPs (September 15, 2009). EFA 2009 Bergen Meetings Paper, ZEW - Centre for European Economic Research Discussion Paper No. 09-045, Available at SSRN: https://ssrn.com/abstract=1341638 or http://dx.doi.org/10.2139/ssrn.1341638

Waldemar Rotfuss (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

Christian Conrad

Heidelberg University - Alfred Weber Institute for Economics ( email )

Grabengasse 14
Heidelberg, D-69117
Germany
+49 (06)221 543173 (Phone)

HOME PAGE: http://www.uni-heidelberg.de/conrad

ETH Zürich - KOF Swiss Economic Institute ( email )

Zurich
Switzerland

Daniel Rittler

Heidelberg University - Alfred Weber Institute for Economics ( email )

Bergheimer Straße 58
Heidelberg, D-69115
Germany
+49 6221 54 2908 (Phone)

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