Mardi | 2013-11-12
salle des thèses
This paper investigates the long-term and short-term determinants of the carbon price during the second phase of the European Union Emission Trading Scheme (EU ETS (2008-2012)). As-suming markets efficiency, I examine the extent to which the allowance price can be explained by marginal abatement costs. Specifically, I derive and estimate a structural model of allowance price while accounting for two structural breaks occurred on the carbon spot price series on October 2008 and September 2011. While the first break resulted mainly from the 2008 financial and economic crisis, the second break is probably caused by the economic downturn in late 2011. I find a significant long-run equilibrium between the carbon price, the price of gas and the economic activity. I find also that the short-run dynamics reflect adjustments in accord with convergence toward that long-run equilibrium. In addition to the long-term determinants, the short-term determinants of carbon price include the price of coal. I find evidence of a trade-off between gas and coal in electricity-generation in the short-run. I conclude that switching from coal toward gas is the abatement method of choice in the short-term.