Does the Price of Carbon Affect the Verified Emissions of European Union Companies? An Analysis of Firm Behavior Within the European Union Emissions Trading Scheme
Open Access
Author:
Turbett, Marley
Area of Honors:
Finance
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
David Haushalter, Thesis Supervisor Brian Spangler Davis, Thesis Honors Advisor
Keywords:
Emissions Trading Scheme Carbon Allowances EU-ETS
Abstract:
The Emissions Trading Scheme in the European Union (EU-ETS) is a relatively under-researched field due to the complexity and immaturity of the carbon market. This paper analyzes the complex relationship between firm behavior and the price of a carbon allowance during the third trading period of the EU-ETS, which occurred from 2013-2020. Correlations are determined based on a company’s quantity of carbon allowances surrendered versus the price of a carbon allowance. Data was obtained from the European Union Registry and follows the behavior of thirty-one firms that operate under permits for the combustion of fuels. All firms analyzed fall into the highest ranking of compliance for the determined trading period. The significance of firm actions during this period displays a knowledge gap due to the lack of available information and transparency of the European Union regarding company participation and regulation.
