Fuel prices impacts on stock market of metallurgical industry under the EU emissions trading system

Moreno, Blanca; García-Álvarez, María Teresa; Fonseca, Ana Rosa

doi:10.1016/j.energy.2017.02.067

Cited by 17 publications

(6 citation statements)

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“…For example, in Phase I, the UK had positive trading profit with a negative g, while Germany made the highest profit with a zero abatement for trading. The extant literature has reviewed the impact of EU ETS on the industrial sectors [32][33][34][35] . To the best of our knowledge, insufficient attention has been directed at the realization of national carbon abatements through firm-level trading in the scheme possibly owing to limited data availability.…”

Section: Discussionmentioning

confidence: 99%

“…Previous studies investigated various aspects related to the operation of the EU ETS, including market efficiency [7][8][9] , allowance allocation [9][10][11] , pricing mechanism [12][13][14][15][16][17][18][19][20] , trade frictions 21 , and market stability reserve 22 . Moreover, the EU ETS has an influence on stock markets [23][24][25][26] , energy markets [27][28][29][30][31] , and energy-intensive industries such as power 32 , metallurgical 33 , and transport industries 34,35 . However, little effort has been exerted on the incentiving effect of allowance trading on abatements; the market incentives are supposed to motivate the emitters to spontaneously and continuously reduce their GHG emissions.…”

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confidence: 99%

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Assessing the impact of ETS trading profit on emission abatements based on firm-level transactions

Guo

Liu

et al. 2020

Nat Commun

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The EU Emission Trading System (ETS) is the oldest and currently the largest carbon market in the world, but its purpose of stimulating carbon emissions via trading profits remains unexamined. Based on the complete firm-level transaction records of the EU ETS Phases I and II, here we show that the participating firms' trading profits and their emission abatements are positively correlated, and the correlation becomes stronger in Phase II than Phase I. Specifically, we observe that non-linearity exists in the correlation; higher firm-level emission abatements can realize larger trading profits. This pattern affects the market fairness, though it may be helpful to incentivise emission abatements. The correlation is more regulated in Phase II than it is in Phase I, thereby indicating that the Phase II is more mature. We also observe that the state-level abatements are largely driven by industrial giants.

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Section: Discussionmentioning

confidence: 99%

mentioning

confidence: 99%

Assessing the impact of ETS trading profit on emission abatements based on firm-level transactions

Guo

Liu

et al. 2020

Nat Commun

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“…The metallurgical sector is another important participant in the EU-ETS. Moreno et al (2017) find that carbon price affects the operation of a firm, which is contributed to the fluctuation of the stock returns.…”

Section: Literature Reviewmentioning

confidence: 99%

The Dynamics of Carbon on Green Energy Equity Investment: Utilizing the Quantile-on-Quantile and Quantile Coherency Approach

Meng

2021

Preprint

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we analyze the dynamic correlation between the carbon price and the stock returns of green energy companies and calculate the hedging effect of the carbon price on stock returns in green energy sectors. The results show that the coefficients of the carbon price change with time and are vulnerable to extreme events like the COVID-19. The quantile-on-quantile (QQ) model results reveal a dynamic effect from the carbon price to the stock returns of green energy sectors. The quantile coherency (QC) approach results show that investors can benefit more in the short term with high-frequency trading to hedge between carbon trading and the green energy stock market. What’s more, the hedging effects are heterogenetic and investors should adjust their hedging strategies in different quantiles.

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“…These performances are similar to those of the mature EU market, such as the relationships between the emission-trading market and energy derivatives or carbon-intensive companies [ 20 , 21 , 22 ], as well as the information connection of emission trading and non-energy commodities [ 23 ]. However, some opposite views state that there is no significant cross-effect between emission trading and stock returns in the EU market [ 24 , 25 ].…”

Section: Literature Reviewmentioning

confidence: 99%

Measuring the Demand Connectedness among China’s Regional Carbon Markets

Guo

Feng

2022

IJERPH

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After years of emission trading in segmented pilots, China operates a unified market in the power system and plans to involve more industries in the coming future. The aim of this study is to detect the commonalities of transaction behaviors across China’s regional carbon pilots, so as to provide an empirical basis for a future multi-sectoral expansion of national trading. Based on a dataset of daily trading volume in seven regional markets during 2014–2021, the empirical results from connectedness measures show that the total demand connectedness ranges from 10% to 24%, indicating the existence of interactions among China’s regional markets. This not-so-wide range of fluctuation usually shows a trend of rising first and then falling within each year, during which the upward trend is basically related to the accounting, verification and compliance of allowances. After these time nodes, the total connectedness declines. In addition, the directional connectedness could help clarify the specific roles that regional markets play in the variations of total demand connectedness when facing the shocks of these time nodes. Meanwhile, the frequency decomposition reveals that a longer-term component of more than 10 days dominates the connectedness. Based on these findings, some policy implications are provided alongside.

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Fuel prices impacts on stock market of metallurgical industry under the EU emissions trading system

Cited by 17 publications

References 50 publications

Assessing the impact of ETS trading profit on emission abatements based on firm-level transactions

Assessing the impact of ETS trading profit on emission abatements based on firm-level transactions

The Dynamics of Carbon on Green Energy Equity Investment: Utilizing the Quantile-on-Quantile and Quantile Coherency Approach

Measuring the Demand Connectedness among China’s Regional Carbon Markets

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