Carbon Markets: Microstructure, Pricing and Policy

Description

This book explores the microstructure of carbon markets and the pricing of carbon financial instruments generally. It provides a critical microstructure analysis of the EU Emissions Trading Scheme (EU-ETS), and also examines the theoretical and related market design issues affecting emissions trading schemes. Individual chapters analyse how intraday pricing evolves in carbon markets, the price impact of block trades in carbon financial instruments and their determinants, short and long-term liquidity effects in carbon markets, and the links between carbon market liquidity and efficiency. The aforementioned issues are explored using case studies of two major trading platforms operating within the EU-ETS. The book concludes by focusing on future policy and regulatory challenges in carbon markets, especially with respect to addressing pricing volatility challenges. Front Matter ....Pages i-xvi An Introduction to the Book (Gbenga Ibikunle, Andros Gregoriou)....Pages 1-14 Emissions Trading in Europe: Background and Policy (Gbenga Ibikunle, Andros Gregoriou)....Pages 15-37 Price Discovery and Trading After Hours on the ECX (Gbenga Ibikunle, Andros Gregoriou)....Pages 39-89 The Price Impact of Block Emissions Permit Trades (Gbenga Ibikunle, Andros Gregoriou)....Pages 91-128 The Liquidity Effects of Trading Carbon Financial Instruments (Gbenga Ibikunle, Andros Gregoriou)....Pages 129-164 Liquidity and Market Efficiency in Carbon Markets (Gbenga Ibikunle, Andros Gregoriou)....Pages 165-200 The Future (Gbenga Ibikunle, Andros Gregoriou)....Pages 201-207 Back Matter ....Pages 209-234