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Publication type: Working paper – expertise – study
Title: EU emissions trading : role of banks and other financial actors - insights from the EU transaction log and interviews
Authors: Cludius, Johanna
Editors: Betz, Regina
DOI: 10.21256/zhaw-3755
Extent: 34
Issue Date: 2018
Edition: Korrigierte, aktualisierte Auflage
Series: SML Working Paper
Series volume: 12
Publisher / Ed. Institution: ZHAW Zürcher Hochschule für Angewandte Wissenschaften
Publisher / Ed. Institution: Winterthur
ISSN: 2296-5025
Language: English
Subjects: EU ETS; Financial sector; Bank; Trading strategy; Hedging; EUTL
Subject (DDC): 363: Environmental and security problems
Abstract: This paper is an empirical investigation of the role of the financial sector in the EU Emissions Trading Scheme (EU ETS). This topic is of particular interest because non-regulated entities are likely to have played an important part in increasing the efficiency of the EU ETS by reducing trading transaction costs and providing other services. Due to various reasons (new rules and regulations, reduced return prospects, VAT fraud investigations) banks have reduced their engagement in EU Emissions Trading and it is unclear how this will impact on the functioning of the carbon market. Our regression analysis based on data from the EU Transaction Log shows that large companies and companies with extensive trading experience are more likely to interact with the financial sector, which is why we expect banks’ pulling out of the EU ETS to affect larger companies more significantly. The semi-structured interviews we conducted with representatives of the financial sector, as well as companies liable under the EU ETS, confirm that banks were involved in the EU carbon market in various capacities, specifically as hedging partners for larger companies in the energy sector. Whether this particular role may be taken on by other financial players is unknown at this stage.
License (according to publishing contract): Not specified
Departement: School of Management and Law
Organisational Unit: Center for Energy and Environment (CEE)
Appears in Collections:Publikationen School of Management and Law

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