The European Commission and EUA Prices: A High-Frequency Analysis of the EC's Decisions on Second NAPs
EFA 2009 Bergen Meetings Paper
ZEW - Centre for European Economic Research Discussion Paper No. 09-045
11 Pages Posted: 12 Feb 2009 Last revised: 21 Sep 2009
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: Suggested Citation