Efficiency of European emissions markets: lessons and implications

Krishnamurti, Chandrasekhar and Hoque, Ariful (2011) Efficiency of European emissions markets: lessons and implications. Energy Policy, 39 (10). pp. 6575-6582. ISSN 0301-4215

Abstract

While prior studies have shown that emission rights and futures contracts on emission rights are efficiently priced, there are no studies on the efficiency of the options market. Therefore, this study fills the gap. We examine empirical evidence regarding the efficiency of the options market for emissions rights in Europe. We employ the put-call parity approach to test the efficiency of options on emission rights traded in the European market. This implies that firms can trade options on emission rights in addition to other existing strategies in order to manage their greenhouse gas emissions.


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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Permanent restricted access to published version due to publisher copyright polciy.
Depositing User: epEditor USQ
Faculty / Department / School: Historic - Faculty of Business and Law - School of Accounting, Economics and Finance
Date Deposited: 21 Oct 2011 01:41
Last Modified: 03 Jul 2013 00:49
Uncontrolled Keywords: CO2 emission rights options; emissions trading scheme; put-call parity; global warming; greenhouse gases; commerce; energy market
Fields of Research (FOR2008): 14 Economics > 1402 Applied Economics > 140205 Environment and Resource Economics
05 Environmental Sciences > 0503 Soil Sciences > 050301 Carbon Sequestration Science
14 Economics > 1402 Applied Economics > 140210 International Economics and International Finance
Socio-Economic Objective (SEO2008): B Economic Development > 91 Economic Framework > 9199 Other Economic Framework > 919901 Carbon and Emissions Trading
Identification Number or DOI: doi: 10.1016/j.enpol.2011.07.062
URI: http://eprints.usq.edu.au/id/eprint/19842

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