Pricing CO2 permits using approximation approaches
Speaker:
Georg Gruell, University Duisburg-Essen
Date and Time:
Friday, April 9, 2010 - 1:55pm to 2:15pm
Location:
Fields Institute, Room 230
Abstract:
Equilibrium models have been widely used in literature with the aim of showing theoretical properties of emission trading systems. First, a new equilibrium model is derived. Second, it is shown that the theoretical permit price is related to changes in the expectation of how long regulated companies will need to exhaust the remaining permits. Third, by application to real data we demonstrate that emission trading systems are inherently prone to jumps.