CO2 cost pass-through and windfall profits in the power sector

By Jos Sijm, Karsten Neuhoff, Yihsu Chen. 2006

725 citations recorded by the source corpus.

Subfields: Economics and Econometrics, Environmental Engineering, Renewable Energy, Sustainability and the Environment

View Paper: https://www.semanticscholar.org/paper/fd25056a2afdb31d087e04d09d55eb8602763170

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Citations in the corpus

Allowance Price Drivers in the First Phase of the EU ETS (2010, background): “Of all market participants in the EU ETS, large power producers exhibit the greatest potential for market power, and, as it happens, they also reaped large profits from the initially high EUA price due to a combination of free allocation and cost pass-through [8, 9, 45, 46, 47].”
Pass-Through of Emissions Costs in Electricity Markets (2014, neutral): “Within a structural framework that is commonly used in the electricity auctions literature (see Wolak (2000) and Hortaçsu and Puller (2008), among others), we first test if firms’ behavior is consistent with full internalization of permit prices.”
Interaction of European Carbon Trading and Energy Prices (2007, background): “…emerges from the markets, these allowances reflect new liquid assets (some critics argue that polluters have been given windfall profits in the short term), and thus their consumption (eg. to produce power) involves the opportunity cost of carbon at the market price (see also Sijm et al. 2006).”
Profiting from Regulation: Evidence from the European Carbon Market (2013, background): “Sijm, Neuhoff, and Chen (2006) examine the implications specifically for electricity prices in the Netherlands and Germany and find substantial pass-through of carbon cost.”
Fuel switching in the electricity sector under the EU ETS: Review and prospective (2008, background): “In this work, a 100% allowance cost pass through from producer to consumer is assumed (Sijm et al. 2006).”
Lessons Learned from Three Decades of Experience with Cap-and-Trade (2015, neutral): “The major rationale for an auction was to avoid the windfall profits that would generally result from free allocation of allowances in deregulated electricity markets (Sijm, Neuhoff, and Chen 2006).”
Capital market response to emission rights returns: Evidence from the European power sector☆ (2009, background): “Even though the EU Emission Trading Scheme (ETS) is the world's largestmarket-based environmental regulation, only a few studies have so far tried to quantify its economic effects (e. g. Sijm et al., 2006; Smale et al., 2006; Demailly and Quirion, 2008).”
Implications of CO2 emissions trading for short-run electricity market outcomes in northwest Europe (2008, background): “…Although the number of studies on the impact of the EU ETS on the power sector has grown rapidly over the past 2 years, except for a few studies, empirical evidence on the impact of the EU ETS on electricity prices is still limited (e.g., Levy 2005; Honkatukia et al. 2006; Sijm et al. 2006a).”