Home Country Bias in International Emissions Trading: Evidence from the EU ETS
Project funded by own resources
Project title Home Country Bias in International Emissions Trading: Evidence from the EU ETS
Principal Investigator(s) Hintermann, Beat
Organisation / Research unit Departement Wirtschaftswissenschaften / Public Economics / Public Finance (Hintermann)
Project start 01.01.2016
Probable end 31.12.2020
Status Active
Abstract

We examine the pattern of allowance trades in the European Union Emissions Trading Scheme using highly disaggregated trading data and document a significant and robust home market bias. Our results point to informational transactions costs that increase when trading across national borders. Around 75% of the home bias can be explained by the existing trade pattern in goods and services. Our finding suggests that firms make use of existing trade networks to overcome search costs in bilateral allowance trade. The home bias furthermore differs across firms, implying that marginal abatement costs are not equalized across market participants.

Keywords Emission permit market, EU ETS, transactions costs, gravity equation, home bias
Financed by University funds
Other funds
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Cooperations ()

  ID Kreditinhaber Kooperationspartner Institution Laufzeit - von Laufzeit - bis
4493256  Hintermann, Beat  Ludwig, Markus, Professor  University of Braunschweig  01.01.2017  31.12.2020 
   

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10/08/2020