Photo Anouk Faure

Anouk Faure

Jeunes docteurs et ATER
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  • Tél. professionnel 0140977821
  • Bureau à Paris Nanterre (Bât. + num.) G313H
  • Research group

      Développement Durable, Environnement et Energie

2021-18 "Technological Progress and Carbon Price Formation: an Analysis of EU-ETS Plants"

Marc Baudry, Anouk Faure

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Abstract
This study investigates the nature of technological progress in six manufacturing industries covered under the EU-ETS, plus the power sector, and its effect on carbon price formation using marginal abatement cost curves. We adopt a technological frontier framework, which we calibrate to input and output data at the plant level from 2013 to 2017, with a directional distance function approach. Our results reveal that most of the time, technological progress resulted in inflating baseline emissions, despite decreasing the carbon intensity of production. In our sample industries, technological progress therefore leads to increase abatement efforts, raising the equilibrium price of carbon.
Classification-JEL
Q55, O33, D24, L6
Mot(s) clé(s)
Directed technological change, frontier analysis, EU-ETS
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2020-19 "Emissions Trading with Transaction Costs"

Marc Baudry, Anouk Faure, Simon Quemin

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Abstract
We develop an equilibrium model of emissions permit trading in the presence of fixed and proportional trading costs in which the permit price and firms’ participation in and extent of trading are endogenously determined. We analyze the sensitivity of the equilibrium to changes in the trading costs and firms’ allocations, and characterize situations where the trading costs alternatively depress or raise permit prices relative to frictionless market conditions. We calibrate our model to annual transaction and compliance data in Phase II of the EU ETS (2008-2012) which we consolidate at the firm level. We find that trading costs in the order of 10 k€ per annum plus 1€ per permit traded substantially reduce discrepancies between observations and theoretical predictions for firms’ behavior (e.g. autarkic compliance). Our simulations suggest that ignoring trading costs leads to an underestimation of the price impacts of supply-curbing policies, this difference varying with the incidence on firms.
Classification-JEL
D22, D23, H32, L22, Q52, Q58
Mot(s) clé(s)
Emissions trading, Transaction costs, Policy design and evaluation, EU ETS
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