Environmental policy and speculation on markets for emission permits

Environmental policy and speculation on markets for emission permits / Paolo Colla, Marc Germain & Vincent Van Steenberghe. Economica, Vol. 79, Issue 313, pp. 152-182, 2012

draft : http://www.europlace-finance.com/files/_financed_paper_1315.pdf

Speculators are active in large markets for emission permits such as those developing under the Kyoto Protocol. Since speculators help risk‐averse firms hedging the risk stemming from uncertain future demand, their entry reduces permits’ expected returns and volatility. We characterize the optimal environmental policy by the agency setting the total amount of permits when speculators are active. Whenever the agency is sufficiently risk‐tolerant, speculators improve aggregate welfare by fostering firms’ production. On the other hand, under a moderately risk‐averse agency, the increase in production volatility induced by speculators negatively affects social welfare (© the authors)



Citer ce billet
Danièle Revel (2012, 3 janvier). Environmental policy and speculation on markets for emission permits. Veille énergie climat. Consulté le 19 juin 2024, à l’adresse https://doi.org/10.58079/o9e9

Vous aimerez aussi...

Laisser un commentaire

Votre adresse e-mail ne sera pas publiée. Les champs obligatoires sont indiqués avec *

Ce site utilise Akismet pour réduire les indésirables. En savoir plus sur comment les données de vos commentaires sont utilisées.

Rechercher dans OpenEdition Search

Vous allez être redirigé vers OpenEdition Search