Home country bias in international emissions trading: Evidence from the EU ETS

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Home country bias in international emissions trading: Evidence from the EU ETS

JournalArticle (Originalarbeit in einer wissenschaftlichen Zeitschrift)

ID	4660701
Author(s)	Hintermann, Beat; Ludwig, Markus
Author(s) at UniBasel	Hintermann, Beat
Year	2023
Title	Home country bias in international emissions trading: Evidence from the EU ETS
Journal	Resource and Energy Economics
Volume	71
Pages / Article-Number	101336
Keywords	Emission permit market, EU ETS, Transactions costs, gravity model, home bias
Abstract	We examine the pattern of allowance trades in the European Union Emissions Trading System (EU ETS) using highly disaggregated trading data and identify a significant and robust home market bias. Our results point to informational transactions costs that increase when trading across national borders. The existing trade pattern in goods and services explains two thirds of the home bias, with the remainder due to other causes. Our finding suggests that firms make use of existing trade networks to overcome search costs in bilateral allowance trade. Since the home bias differs across firms, it follows that marginal abatement costs are not equalized across market participants of the EU ETS.
Publisher	Elsevier
ISSN/ISBN	0928-7655 ; 1873-0221
edoc-URL	https://edoc.unibas.ch/93142/
Full Text on edoc	Available
Digital Object Identifier DOI	10.1016/j.reseneeco.2022.101336

01/12/2023

Research Database / FORSCHUNGSDATENBANK