• Environmental and Resource Economics Review
• /
• v.23 no.2
• /
• pp.157-185
• /
• 2014

The Kyoto Protocol has extended its life until 2020 by the decision at COP18 in Doha, Qatar in 2012. So has the Kyoto Mechanism of CDM, JI, and ETS. Nonetheless, the sustainability of CDM projects is jeopardized by the recent rule changes in the international emissions trade market such as EU ETS and the price decrease in emission credits. In particular, the domestic CDM projects reducing non-$CO_2$ GHG emissions are being directly affected. This study examines the trend of carbon credit price change in the international market. It also examines how the rule changes in the international emissions trade market have affected domestic non-$CO_2$ CDM projects through which mechanisms. The policy implications drawn from this study is two-fold: it suggests how the government can assist the project developers in utilizing GHG emission reduction technologies and the market in promoting investment environment before the domestic ETS enters into effect in 2015; apart from possible measures within ETS, an additional measures such as bilateral carbon offset system is suggested to help the private sector reduce uncertainty in investment and increase options to choose.

• Bulletin of Korea Environmental Preservation Association
• /
• s.403
• /
• pp.19-21
• /
• 2013

국내 배출권거래제는 2015년 1월부터 도입된다. 정부는 그 동안 시행령을 마련하였고, 앞으로 기본계획과 할당계획을 확정할 예정이다. 기본계획과 할당계획은 구체적인 최종 세부 운영규칙과 관련된 사항이다. 각 운영요소의 대안별 선택 및 대안간 평가에 관한 실증적 검토, 운영요소 간 상호 연계 효과 등에 관한 최종적 점검이 필요하다.

• Environmental and Resource Economics Review
• /
• v.21 no.2
• /
• pp.301-319
• /
• 2012

The primary purpose of Renewable Portfolio Standard (RPS) is to facilitate investment in renewable energy technology. Since emission trading program has similar purpose, it is conceivable to attempt to link RPS and emission trading program through interlinked markets. RPS in Korea with single REC and emission allowance markets has particular advantages for constructing linkages between two markets. This paper provides a real option model to examine investment effects of linkage of RPS to the trading program. Emission permit price and REC price are assumed to follow stochastic processes and renewable investment is irreversible. The result shows that linked market provides further incentive for renewable investment by raising managerial flexibility for power companies.

• Environmental and Resource Economics Review
• /
• v.21 no.4
• /
• pp.809-850
• /
• 2012

A linkage of emissions trading schemes among Korea, China and Japan demonstrates overall increase in gross domestic product (GDP). However, it also demonstrates reductions in household consumption, and the impact of integration could be very unbalanced between the countries. In particular, the reductions in domestic marginal costs are high in both Korea and Japan. Therefore, household consumptions in the two countries decrease despite increases in GDP because Korea and Japan will be purchasers of emissions rights. China, on the other hand, will experience the opposite. The unbalanced impacts on real household consumptions are intensified when emission credits are allocated via paid auctions instead of free allocation. This was demonstrated to be the case because the circumstances of three countries are intensified when using a paid emissions credit allocation scheme, and their differences could potentially hinder the cooperation between the three countries. Under the free allocation scheme, the emission trading schemes' unbalanced impacts on consumption could be mitigated, but unavoidable negative impacts of free allocation schemes are also serious. Based on the analysis results, Korea, China, and Japan will individually face complicated impacts if their carbon markets are integrated. Although the GDP of three countries will increase as a result of carbon market integration, the benefits of integration will surely be unbalanced, and the three countries will experience negative impacts in terms of actual consumption or employment. In particular, increases in income and consumption, reductions in employment, and energy dependence by credit purchasers (Japan and Korea) and production reduction and possibility of offshoring faced by revenue producing countries (China) could serve as a barrier to carbon market integration. To maximize the positive influences of carbon market integration while reducing the risks of negative side effects, the development and application of complimentary policy tools, such as import duties or discounts for emissions credits, are required.

• JOURNAL OF ELECTRICAL WORLD
• /
• s.456
• /
• pp.33-40
• /
• 2014

• Environmental and Resource Economics Review
• /
• v.21 no.1
• /
• pp.27-67
• /
• 2012

This paper analyzed the effect of transaction costs on the prices and trading volumes at the initial stage of emission markets and also examined how the size of the effect differs depending on the characteristics of the transactions. We built trading protocols modeling a recursive process to search the trading partner and make transactions with several behavioral assumptions considering the situations of early markets. The simulations results show that adding transaction costs resulted in reduction of trading volumes. Furthermore, the speed of reduction in trading volume to the increase of transaction costs is higher when there is scale economy. With a certain level of scale economy, the trading volumes abruptly fall down to almost zero as the transaction cost gets over a certain level. This suggests the possibility of a failed market. Since the scale economy is thought to be significant in the early stage of emission trading market, it is desirable to design a trading system that maximizes trading volumes and minimizes unit transaction costs at the outset. One of the alternatives to meet these conditions is to establish a centralized exchange and take measures to increase trading volumes.

• Journal of Environmental Policy
• /
• v.12 no.4
• /
• pp.93-117
• /
• 2013

We analyze the optimal hedge ratio and hedge effectiveness with different periodic times between spot and futures on EUA and CER based on EU-ETS. The Main finding are as follows. The first, hedging model which considers the time-varying variance is not more accurate than non-time-varying hedging models. The second, optimal hedge ratios are different even though hedge effectiveness is similar for the hedging purpose. The third, hedge effectiveness has uncertainty if hedge period is short. In case of EUA it needs to over 6 weeks and CER needs to over 7 weeks. The fourth, cross hedge with CER futures is not suitable for profit ratios.

• Proceedings of the KIEE Conference
• /
• 2007.11b
• /
• pp.214-216
• /
• 2007

Post 2012 기후변화협약 체제의 토래 및 강화되는 기후변화협약으로 인해 우리나라의 온실가스 의무감축이 확실하게 예견되고 있는 현 시점에서 우리나라의 온실가스 감축이행을 위한 대응책의 필요성이 증가하고 있다. 특히 발전부문은 우리나라의 온실가스 배출의 약 30%를 차지하고 있으며, 경제성장에 따라 온실가스 배출량이 빠른 속도로 증가하고 있으므로 Post 2012 기후변화협약 체제의 대응책이 보다 필요하다. 본 연구에서는 향후 발전부문에 온실가스 감축의무가 부담될 것을 고려하여 온실가스 배출량 제약 및 배출권거래제를 고려한 설비계획을 도출하고자 한다. 현재 우리나라의 전원 개발계획에서 사용되고 있는 전산모형(WASP, POWERSYM 등)은 온실가스 배출량 제약 및 배출권거래제를 고려하지 못하므로 MEFISET 모형을 이용하여 이를 고려하고자 한다. 그러나 MEFISET 모형은 설비예비력 제약조건을 통해 공급신뢰도를 만족하고 있다. 이러한 설비계획 결과는 공급신뢰도 기준 을 만족시키기 위해 과도한 설비계획 결과를 도출한다. 따라서 본 연구에서는 이를 보완하기 위해 Visual C를 통해 구현한 LOLP 프로그램을 통해 공급신뢰도 기준을 만족시키기 위한 적정 설비예비력을 추정하고자 한다.

• Environmental and Resource Economics Review
• /
• v.21 no.3
• /
• pp.519-542
• /
• 2012

In this paper, we empirically analyzed whether carbon leakage really happened in EU by comparing before and after the period of EU ETS. We regarded foreign direct investment outflows as indicator of carbon leakage and analyzed panel regression between production cost including environment cost and this FDI variable. Also we consider foreign market potential to analyze market oriented FDI. According to this analysis, carbon leakage was observed in some models for manufacturing industry. However carbon leakage did not prove consistently in a variety of models and it is hard to speak carbon leakage was happened in EU ETS. Notwithstanding relatively short time series of data, in the view of the fact that carbon leakage was tested in some models, Korea also should keep in mind the possibility of carbon leakage and design emission trading scheme.

• Journal of Environmental Policy
• /
• v.10 no.2
• /
• pp.45-60
• /
• 2011

An aim of this paper is to test four hypotheses on price volatility in the $CO_2$ emission markets focusing on European Climate Exchange(ECX) in the EU Emission Trading Schemes(EU ETS) and Chicago Climate Exchange(CCX). I expect that, due to an influx of market information, a differently designed exchange market would bring a different price volatility, and various types of emission permits in the same exchange market would result in the same effects on the price volatility. Major findings are that the price volatility is same regardless of the types of emission exchange markets and emission permits comparing the rate of returns. However, comparing the GARCH variance, the volatility between ECX EUAs and CCX-CFIs and the volatility between EUAs(CERs) futures and daily futures are different with the exception of the volatility between EUAs futures and CERs futures. In conclusion, the price volatility depends on the types of exchanges and the types of emission permits.