First Evidence of Asymmetric Cost Pass-through of EU Emissions Allowances: Examining Wholesale Electricity Prices in Germany
This paper applies the literature on asymmetric price transmission to the emerging commodity market for EU emissions allowances (EUA). We utilize an error correction model and an autoregressive distributed lag model to measure the relationship between CO2 price changes and the development of wholesale electricity prices. Using data from the German market for electricity and EUAs, we find that the rising prices of EUAs have a stronger impact on wholesale electricity prices than falling prices -- the first empirical evidence of asymmetric cost passthrough for these new allowances.
Year of publication: |
2007
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Authors: | Zachmann, Georg ; Hirschhausen, Christian von |
Institutions: | DIW Berlin (Deutsches Institut für Wirtschaftsforschung) |
Saved in:
freely available
Extent: | application/pdf |
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Series: | Discussion Papers of DIW Berlin. - ISSN 1619-4535. |
Type of publication: | Book / Working Paper |
Language: | English |
Notes: | Number 708 8 pages long |
Source: |
Persistent link: https://www.econbiz.de/10005069017
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