We estimate an Error-Correction Model by using dynamic OLS to investigate carbon price drivers in early Phase II. The futures contract negotiated from January to December 2008 on the European Climate Exchange is the focus of our analysis. We consider the allowance price as explained by oil...

Does current and future supply affect the market price of pemits? The answer should be positive as the market itself was created by the governments that also control the supply. However, governments themselves may be uncertain about the relation between supply and price and may go through a...