Neuhoff, Karsten; Schopp, Anne; Boyd, Rodney; Stelmakh, … - 2012
so as to hedge future carbon costs. As the surplus exceeds this hedging demand, additional allowances need to be acquired … as speculative investment. This requires higher rates of return and implies that expected future carbon prices are highly … discounted. This could explain the recent drop in carbon prices. The analysis shows that the volume of unused allowances matters …
