ETS Markets and Electricity Futures Prices

2011; RELX Group (Netherlands); Linguagem: Inglês

10.2139/ssrn.1808124

ISSN

1556-5068

Autores

Manuel Moreno, Samy Dana,

Tópico(s)

Market Dynamics and Volatility

Resumo

This paper addresses the economic impact of the carbon allowance market in the European Emission Trading Scheme (ETS) on the futures market of electricity, gas, and coal. Our findings seem to confirm that, as expected, electricity returns are positively affected by carbon allowances, coal, and natural gas returns. Additionally, a SVAR model with short-run restrictions and two lags shows that lagged returns of allowances affect current returns of allowances and energy futures prices. Finally, an impulse-response analysis seems to corroborate that electricity futures returns suffer the consequences from shocks on the allowances returns.

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