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Transaction costs of firms in the EU ETS
Date Issued
April 2009
Date Available
16T13:45:25Z June 2010
Abstract
This paper is a first attempt to empirically measure transaction costs – a composite of administrative
costs and trading costs – of firms in the European Union's CO2 Emissions Trading Scheme (EU ETS)
during its trial phase (2005-2007). This analysis provides some evidence that transaction costs of firms
were mainly of administrative nature. There are also remarkable economies of scale, with the costs per
tonne of CO2 lower for participants with larger allocation. The composition of these costs diverges too
as the share of early implementation costs tend to be significantly larger emitters. Trading transaction
costs were not significant and, hence, trade prohibitive and other factors – self-sufficiency in
compliance and low allowance price – played a major role in deciding whether to trade or not during
the trial trading period.
Sponsorship
Not applicable
Type of Material
Conference Publication
Publisher
Irish Economic Association
Copyright (Published Version)
2009, The Irish Economic Association
Classification
D23
H41
O13
Q52
Q54
Q58
Subject – LCSH
Emissions trading--Europe
Transaction costs
Environmental policy--Europe
Language
English
Status of Item
Not peer reviewed
Conference Details
Twenty-third Annual Conference of the Irish Economic Association, Blarney, Co. Cork, 24-26 April 2009
This item is made available under a Creative Commons License
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