scholarly journals Emissions trading and the GATS financial services provisions

2014 ◽  
Vol 13 (1) ◽  
pp. 44-66
Author(s):  
Felicity Jane Deane
Keyword(s):  
Financial Services ◽  
Design Methodology ◽  
Emissions Trading ◽  
Ghg Emissions ◽  
Global Scale ◽  
Content Type ◽  
Financial Products ◽  
Emissions Trading Scheme ◽  
Trading Scheme ◽  
Definition Of

Purpose – The purpose of this paper is to determine whether greenhouse gas (GHG) tradeable instruments will be classified as financial products within the scope of the World Trade Organization (WTO) law and to explore the implications of this finding. Design/methodology/approach – This purpose is achieved through examination of the units of the Australian carbon pricing mechanism (the CPM), namely eligible emissions units. These units are analysed through the lens of the definition of financial products provided in the General Agreement for Trade in Services (the GATS). Findings – This paper finds that eligible emissions units will be classified as financial instruments, and therefore the provisions that govern their trade will be regulated by the GATS. Considering this, this paper explores the limitations that are introduced by the Australian legislation on the trade of eligible emissions units. Research limitations/implications – This paper is limited in its analysis to the Australian CPM. In order to draw conclusions on the issues raised by this analysis, it is necessary to consider the WTO requirements against an operating emissions trading scheme. The Australian CPM presents a contemporary model of an appropriate scheme. Originality/value – The findings in this paper are crucial in a GHG-constrained society. This is because emissions trading schemes (ETSs) are becoming popular measures for pricing GHG emissions, and for this reason the units that are traded and surrendered for emissions liabilities must be classified appropriately on a global scale. Failing to do this could result in differential treatment that may be contrary to the intentions of important global agreements, such as the WTO-covered agreements.

scholarly journals The Price Determinants of the EU Allowance in the EU Emissions Trading Scheme

2018 ◽  
Vol 10 (11) ◽  
pp. 4009 ◽  
Author(s):  
Chune Chung ◽  
Minkyu Jeong ◽  
Jason Young
Keyword(s):  
Emissions Trading ◽  
Causal Effect ◽  
Forecast Error ◽  
Ghg Emissions ◽  
Relative Effect ◽  
Causality Test ◽  
Coal Price ◽  
Emissions Trading Scheme ◽  
Trading Scheme ◽  
The Eu

The Kyoto Protocol came into effect in 1997 to curb greenhouse gas (GHG) emissions and to address the problem of climate change. The Protocol includes a market-based mechanism designed to offset GHG emissions, called the emissions trading scheme (ETS), allowing companies to “trade” their shortage or surplus allowance. This study examines the determinants of the EU allowance (EUA) price in Phase 3 of the EU ETS (2013–2017). First, the causality between the EUA price and other variables is determined using a Granger causality test. Second, the correlation between the EUA price and each variable is measured using a VECM estimation and an impulse response function. Finally, the relative effect of each variable on the EUA price is determined using a forecast error variance decomposition. The results show that the EUA price has a causal effect on the prices of electricity and natural gas. Second, all variables, except the minimum temperature, show a positive relationship with the EUA price. Furthermore, when unexpected shocks occur, the EUA price shows the highest response to its past price, followed by the electricity price. Third, the past EUA price has the most influence on the EUA price, followed by the coal price.

Market efficiency and the basis in the European Union Emissions Trading Scheme

2014 ◽  
Vol 41 (4) ◽  
pp. 615-628 ◽  
Author(s):  
Andros Gregoriou ◽  
Jerome Healy ◽  
Nicola Savvides
Keyword(s):  
Emissions Trading ◽  
Eu Ets ◽  
The European Union ◽  
Content Type ◽  
Spot Prices ◽  
Emissions Trading Scheme ◽  
Cost Of Carry ◽  
Trading Scheme ◽  
The Cost ◽  
The Eu

Purpose – The purpose of this paper is to investigate the validity of the cost of carry model by examining the time series properties of the deviation between future and spot prices in the European Union Emissions Trading Scheme (EU-ETS) over the time period 2005-2012. The paper utilizes a non-linear mean reverting adjustment mechanism, and discovers that although deviations of future from spot prices can exhibit a region of non-stationary behaviour, overall they are stationary indicating market efficiency in the trading of carbon permits. Design/methodology/approach – The methodology involves non-linear mean reverting unit root tests. Findings – The findings provide insights into the functioning of the EU-ETS market. They suggest that it is informationally efficient and does not permit arbitrage between spots and futures. Originality/value – The authors are the first study to examine efficiency in the EU-ETS by investigating the validity of the cost of carry model. The authors are also the only study to look at efficiency in both Phase I and Phase II of the scheme.

scholarly journals Moving Steadily or Great Leap Forward? The Emerging Carbon Market in China

2013 ◽  
Vol 18 (2) ◽  
pp. 233 ◽  
Author(s):  
Ying Shen
Keyword(s):  
Carbon Emissions ◽  
Emissions Trading ◽  
Ghg Emissions ◽  
Policy Instrument ◽  
Carbon Market ◽  
Chinese Government ◽  
Carbon Markets ◽  
Emissions Trading Scheme ◽  
Trading Scheme ◽  
Environmental Policy Instrument

China has become a large greenhouse gas (‘GHG’) emissions source due to its rapid industrialisation and urbanisation. Given the heavy environmental footprint caused by China’s economic growth, the Chinese government has recognised the need to control carbon emissions and mitigate climate change. Indeed, China has made remarkable progress in reducing its energy consumption per unit of gross domestic product (‘GDP’). However, these improvements are mainly the result of the most readily available abatement options. Given that simple solutions have almost been exhausted, cost-effective market-based instruments such as carbon emissions trading and carbon markets have become the focus of the Chinese leadership’s attention and have begun to emerge and develop in China. At this stage the primary issue that must be considered by the Chinese government is how to implement an emissions trading scheme (‘ETS’) — whether to adopt such a new environmental policy instrument step by step in an evolutionary manner or whether to fully implement it instantly in a revolutionary way. This article considers the future direction of an emerging carbon market in China. It first provides a comprehensive and up-to-date review of current pilot ETS programs in China. Based on the review of these programs, China’s pilot ETS programs and the well-established European Union Emissions Trading Scheme (‘EU ETS’) are compared. The improvements made by, and the shortcomings of, these pilot programs (which could be considered by the Chinese government in choosing an appropriate development model of the ETS in the near future) are summarised. The article concludes by assessing the prospects of an ETS in China.

Features and prospect of China’s national GHG emissions trading scheme

2020 ◽  
Vol 11 (2) ◽  
pp. 155-167 ◽  
Author(s):  
Hidenori Niizawa ◽  
Daisuke Hayashi ◽  
Xianbing Liu
Keyword(s):  
Emissions Trading ◽  
Ghg Emissions ◽  
Emissions Trading Scheme ◽  
Trading Scheme

Russian companies uneven on environmental adaptation

2021 ◽  
Keyword(s):  
Climate Change ◽  
Emissions Trading ◽  
Transition Period ◽  
The United States ◽  
Absorption Capacity ◽  
Content Type ◽  
Warming Climate ◽  
Emissions Trading Scheme ◽  
Trading Scheme ◽  
Fuel Source

Significance The global shift towards decarbonisation threatens Russian exports and public revenue, and the more aware mining and other companies are paying greater attention to environmental, social and governance (ESG) issues. A warming climate and increasingly frequent natural disasters raise costs and liabilities for companies and the state, while pollution will undermine public health and life expectancy. Impacts Government ministries must submit plans to adapt to climate change by December for inclusion in the 2022-24 budget. Climate change offers an area for political collaboration with the United States. Russia will push for recognition of its forest absorption capacity and of nuclear energy as 'green'. Moscow will promote its plentiful natural gas reserves as the optimum transition-period fuel source. Several green projects will undergo pilot testing next year, including hydrogen production and an emissions trading scheme in Sakhalin.

China will enforce environmental policy more strictly

2018 ◽  
Keyword(s):  
Air Pollutants ◽  
Environmental Governance ◽  
Emissions Trading ◽  
Holistic Approach ◽  
Content Type ◽  
Resources Management ◽  
Emissions Trading Scheme ◽  
The Government ◽  
Trading Scheme ◽  
People's Congress

Subject The coming restructuring of the environment-related government organs. Significance An overhaul of China’s environmental bureaucracy announced at the National People's Congress last month shows that the government is committed to realising its 'ecological civilisation' agenda by improving environmental governance and enforcement. It aims to achieve this by reducing fragmentation between elite policymaking institutions and by a centralised, integrated and holistic approach to climate change and environmental and natural resources management. Impacts Businesses face regulatory uncertainty until at least the June deadline for finalising the new ministerial departments, and probably beyond. State capacity and willingness to enforce environmental rules strictly will increase. Pollution in water systems and air pollutants other than carbon dioxide will now receive more attention. The rollout of China’s national emissions trading scheme, which is already behind schedule, may be negatively affected.

Three financial regulators issue reports on product and service innovations

2017 ◽  
Vol 18 (1) ◽  
pp. 84-91 ◽  
Author(s):  
Melanie Brody ◽  
Ori Lev ◽  
Jeffrey P. Taft ◽  
Guy Wilkes ◽  
Matthew Bisanz ◽  
...  
Keyword(s):  
Financial Services ◽  
Design Methodology ◽  
Financial Innovation ◽  
Content Type ◽  
Practical Advice ◽  
Financial Products ◽  
The Us ◽  
The Uk ◽  
Issue Reports ◽  
Financial Technology

Purpose To summarize developments by the US Consumer Financial Protection Bureau (“CFPB”), the US Office of the Comptroller of the Currency (“OCC”), and the UK Financial Conduct Authority (“FCA”) in their respective efforts to facilitate responsible financial innovation, and to predict what the financial services industry may expect in coming months. Design/methodology/approach This article summarizes financial marketplace developments of particular interest to the CFPB based on the CFPB’s report on its initiative to support responsible financial innovation and CFPB Director Richard Cordray’s speech at the Money 20/20 conference. The article also discusses the OCC’s release of a framework for its “Innovation Initiative”, providing insight to how the agency intends to engage with the fintech industry. Finally, this article explains how the FCA has identified the first cohort of firms to participate in its regulatory sandbox to test new financial products and services as part of the FCA’s wider “Project Innovate” initiative. Findings Financial technology innovators should closely monitor the agencies’ recent regulatory and policy developments to facilitate responsible financial innovation to be aware of new opportunities and regulatory consequences. Originality/value This article provides practical advice for fintech companies and other financial innovators on regulatory and policy updates from experienced financial services lawyers.

Who is the “reasonable investor”?

2016 ◽  
Vol 17 (4) ◽  
pp. 61-64
Author(s):  
Jonathan R. Tuttle ◽  
Matthew E. Kaplan ◽  
Benjamin R. Pedersen
Keyword(s):  
United States ◽  
Financial Services ◽  
Design Methodology ◽  
Court Decisions ◽  
Clear Definition ◽  
Securities Litigation ◽  
Content Type ◽  
Objective Basis ◽  
Definition Of ◽  
Types Of Information

Purpose To discuss how two recent court decisions applied the materiality standard concerning information disclosed to investors and the definition of a “reasonable investor”. Design/methodology/approach Explains the origins and evolution of the materiality standard and the “reasonable investor” paradigm, discusses the difficulty in applying the materiality standard in the absence of a clear definition of the “reasonable investor”, and addresses potential implications of two 2016 cases, Flannery v. SEC and United States v. Litvak, on whether materiality should be applied on a subjective, rather than objective, basis and evidentiary burdens in proving materiality. Findings Flannery and Litvak suggest that, in assessing what information is material to a “reasonable investor”, courts may place increasing weight on the relative sophistication of investors, the types of securities and the nature of the markets in which they are investing, and types of information investors in those securities and markets typically consider to be material. Originality/value Informed analysis by experienced practitioners in capital markets, financial services and securities litigation.

China’s carbon trading scheme will fall short of hopes

2020 ◽  
Keyword(s):  
Carbon Emissions ◽  
Electricity Generation ◽  
Emissions Trading ◽  
Electricity Price ◽  
Carbon Trading ◽  
Content Type ◽  
Carbon Emissions Trading ◽  
Emissions Trading Scheme ◽  
Trading Scheme

Subject China's emissions trading scheme. Significance China is expected to launch the next phase of its national carbon emissions trading scheme (ETS) this year, involving simulated trading. It will be the world’s largest ETS. Impacts The initial impact will be to encourage efficient coal-fired electricity plants rather than other forms of electricity generation. The threat of an EU tax on emissions-intensive imports is likely to accelerate China's attempts to develop a national ETS. The effort to establish an ETS may bolster electricity price deregulation efforts.

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