Analytics and Empirics of Emission Trading
In the acadamic discussion emission trading schemes (ETS) have emerged as a political instrument to both comply to emission targets and achieve this in a cost effcient way for all participants. However, until today most of the theoretical analysis in this area has been done in a qualitative rather than a quantitive way. In our research we aim to analyze already established ETS in terms of price volatility and jumpy behaviour and, based on this, point out alternative designs. We investigate how linking of different ETS effects the market price and consider various hybrid schemes. Our analysis is based on stochastic equilibrium models and employs techniques in financial mathematics used for option pricing.
Details: Analytics and Empirics of Emission Trading
Cooperation: We will closely work together with the research groups of
- Professor Fred Espen Benth, Centre of Mathematics for Application, Departement of Mathematics, University of Oslo, Norway
- Dr. Luca Taschini, Grantham Research Institute, London School of Economics, UK