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Carbon price dynamics in the EU ETS - The impact of fuel switching

Goude Rolfsmark, Martin LU and Hammarstedt, Daniel (2021) NEKH01 20211
Department of Economics
Abstract (Swedish)
This paper examines the carbon price dynamics in the European Emission Trading System (EU ETS). It seeks to answer whether these can be explained by marginal emission abatement costs, as stated by theoretical propositions. The primary abatement method, fuel switching, and other potential determinants are examined to test their relative importance in carbon price dynamics. The results from the performed OLS-regressions do not support the hypothesis that fuel switching is a strong indicator of the carbon price movements. The results suggest that the market potentially suffers from inefficiency and/or that the tested model is insufficient to explain the price fluctuations.
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author
Goude Rolfsmark, Martin LU and Hammarstedt, Daniel
supervisor
organization
course
NEKH01 20211
year
type
M2 - Bachelor Degree
subject
keywords
EU ETS, carbon price, fuel switching, emission abatement cost
language
English
id
9057145
date added to LUP
2021-07-05 13:38:09
date last changed
2021-07-05 13:38:09
@misc{9057145,
  abstract     = {{This paper examines the carbon price dynamics in the European Emission Trading System (EU ETS). It seeks to answer whether these can be explained by marginal emission abatement costs, as stated by theoretical propositions. The primary abatement method, fuel switching, and other potential determinants are examined to test their relative importance in carbon price dynamics. The results from the performed OLS-regressions do not support the hypothesis that fuel switching is a strong indicator of the carbon price movements. The results suggest that the market potentially suffers from inefficiency and/or that the tested model is insufficient to explain the price fluctuations.}},
  author       = {{Goude Rolfsmark, Martin and Hammarstedt, Daniel}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Carbon price dynamics in the EU ETS - The impact of fuel switching}},
  year         = {{2021}},
}