On the impacts of allowance banking and the financial sector on the EU Emissions Trading System

Dimos, Sotirios; Evangelatou, Eleni; Fotakis, Dimitris; Mantis, Andreas; Mathioudaki, Angeliki

doi:10.1007/s41207-020-00167-x

Cited by 4 publications

(1 citation statement)

References 38 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…We consider monthly networks constructed by the allowance exchange date from the EUTL [13]. We classify the participants as (a) regulated, (b) financial, and (c) governmental, according to their main functionality within the EU ETS following the methodology in [14]. In a nutshell, regulated entities are polluters, governmental are European bureaus, and financial entities are banks, brokers and intermediaries, which are supposed to ease the transactions.…”

Section: Designate the Core Transactorsmentioning

confidence: 99%

Understanding the EU ETS Market Structure Using Transactions of Core Participants

Dimos¹,

Evangelatou²,

Fotakis³

et al.

Global NEST International Conference on Environmental Science &Amp; Technology

View full text Add to dashboard Cite

European Union Emission Trading System (EU ETS) is a key instrument of EU’s climate policy and the largest international cap-and-trade system. Every allowance transaction is recorded in an electronic registry, called European Union Transaction Log (EUTL). Utilizing the vast amount of EUTL data, we exploit the EU ETS transaction network as a means for understanding in depth the allowance market structure. We observe that the network follows the core-periphery structure and identify a small subset of core transactors. We provide strong evidence that despite its small size, the part of the network built around core transactors captures all the key properties of the entire EU ETS transactions network. Moreover, due to high and more regular trading, the transactions of the core members lack the “noisy” behaviour typically appearing in the periphery. Through extensive evaluation, we demonstrate that the core transactions can provide better results in explaining and forecasting the allowance price. Our work provides a compact and useful tool which can be used not only towards understanding a large and complex allowance market, but also towards evaluating one of the most prominent environmental policy instruments, the EU ETS.

show abstract

Section: Designate the Core Transactorsmentioning

confidence: 99%