Dealing with a new topic around the climate change finance, we present the carbon market and its mechanism, focussing on the link between the EUA and the CER markets as well as explaining the challenges of carbon regulation and the economy of primary and secondary CERs. Assuming polluting...

With short-term and seasonal variations filtered out, the data for the climate is closer to stationary, predictable for some time in the future and can be approximated with a Markov process, thus demonstrating that climate and weather time series exhibit diffeing characteristics. Hence, based on...

Using Malliavin calculus, we derive under the forward probability measure Ito's formula for anticipating processes in the multi-dimensional case. We use it when the instantaneous volatility, the spot rate and the dividend yield of the stock price are Markov processes to approximate solutions of...

Due to extreme volatility in the prices of CO2 permits observed in the European markets, effective hedging techniques such as futures contracts and option instruments rapidly developed, together with approximations to the dynamics of the underlying. To bridge the gap between theory and practice,...