Carbon market design and market sentiment

IF 5.5 3区经济学 Q1 BUSINESS

Journal of Environmental Economics and Management Pub Date : 2024-09-20 DOI:10.1016/j.jeem.2024.103057

Grischa Perino

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引用次数: 0

Abstract

Concerns about systematic price distortions in the EU Emission Trading System (ETS) have risen in recent years. This paper shows how carbon-market design affects the impact of market sentiment, i.e. systematic deviations of price expectations from fundamentals by at least some market participants, on equilibrium prices. The Market Stability Reserve (MSR) of the EU ETS that adjusts supply based on past allowance banking undermines self-stabilization of the carbon market by discouraging rational intertemporal arbitrage. The MSR increases vulnerability of the EU ETS to market sentiments. Initially, the allowance price responds more to distorted expectations while the MSR (partially) prevents the distortion to spread across periods. Making the MSR more responsive to banking decisions increases the likelihood that distorted expectations turn out to be correct ex post. In contrast, a mechanism that adjust the cap based on the current allowance price does not face a trade off between stabilizing prices in the present and the future.

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碳市场设计和市场情绪

近年来，人们对欧盟排放交易体系（ETS）中系统性价格扭曲的担忧与日俱增。本文展示了碳市场设计如何影响市场情绪（即至少部分市场参与者的价格预期系统性地偏离基本面）对均衡价格的影响。欧盟排放交易计划的市场稳定储备（MSR）根据过去的配额库调整供应量，阻碍了理性的跨期套利，从而破坏了碳市场的自我稳定。可变储备金增加了欧盟排放交易计划受市场情绪影响的脆弱性。最初，配额价格对扭曲的预期反应更大，而 MSR（部分）防止了扭曲在不同时期的蔓延。使 MSR 更好地响应银行决策，会增加扭曲的预期在事后被证明是正确的可能性。与此相反，根据当前津贴价格调整上限的机制不会在稳定当前和未来价格之间进行权衡。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Environmental Economics and Management Multiple-

CiteScore

8.00

自引率

4.30%

发文量

期刊介绍： The Journal of Environmental Economics and Management publishes theoretical and empirical papers devoted to specific natural resources and environmental issues. For consideration, papers should (1) contain a substantial element embodying the linkage between economic systems and environmental and natural resources systems or (2) be of substantial importance in understanding the management and/or social control of the economy in its relations with the natural environment. Although the general orientation of the journal is toward economics, interdisciplinary papers by researchers in other fields of interest to resource and environmental economists will be welcomed.