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Market Analysis during the First Year of Korea Emission Trading Scheme

Author

Listed:
  • Jaeseok Lee

    (Energy Institute, Seoul Energy Corporation, 20, Mokdongseo-ro, Yangcheon-gu, Seoul 07978, Korea)

  • Jongmin Yu

    (Department of Economics, Hongik University 94, Wausan-ro, Mapogu, Seoul 121-791, Korea)

Abstract

To derive the supply and demand issues during the first phase of the Korea Emission Trading Scheme (KETS), we investigated the excess or shortage, and the carry-over inflow of carbon emission permits for all of the domestic industries and major corporations. In particular, this study explored the supply and future prospects of offset credits, as well as the allocated permits, by forecasting the inflows of offset credits using the amount of certified reduction in domestic boundaries and overseas sources. We observed both the supply and demand of permits and changes in carbon dioxide (CO 2 ) emission levels during the first phase (2015–2017) by comparing the estimated emission levels and the total permit supply. The results showed that permits were either in surplus or insufficient, depending on the sub-sector, and that a surplus in the supply of permits would occur if companies do not carry over more than 70 million tons of permits to the next period.

Suggested Citation

  • Jaeseok Lee & Jongmin Yu, 2017. "Market Analysis during the First Year of Korea Emission Trading Scheme," Energies, MDPI, vol. 10(12), pages 1-13, November.
    • Handle: RePEc:gam:jeners:v:10:y:2017:i:12:p:1974-:d:120722
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    References listed on IDEAS

    as
    1. Jongmin Yu & Sejoong Lee, 2017. "The Impact of Greenhouse Gas Emissions on Corporate Social Responsibility in Korea," Sustainability, MDPI, vol. 9(7), pages 1-15, June.
    2. Sahbi Farhani & Jaleleddine Ben Rejeb, 2012. "Energy Consumption, Economic Growth and CO2 Emissions: Evidence from Panel Data for MENA Region," International Journal of Energy Economics and Policy, Econjournals, vol. 2(2), pages 71-81.
    3. repec:dau:papers:123456789/4210 is not listed on IDEAS
    4. Park, Hojeong & Hong, Won Kyung, 2014. "Korea׳s emission trading scheme and policy design issues to achieve market-efficiency and abatement targets," Energy Policy, Elsevier, vol. 75(C), pages 73-83.
    5. Chevallier, Julien, 2009. "Carbon futures and macroeconomic risk factors: A view from the EU ETS," Energy Economics, Elsevier, vol. 31(4), pages 614-625, July.
    6. Yu, Jongmin & Mallory, Mindy L., 2014. "Exchange rate effect on carbon credit price via energy markets," Journal of International Money and Finance, Elsevier, vol. 47(C), pages 145-161.
    7. Lee, Jaeseok & Yue, Chengyan, 2017. "Impacts of the US dollar (USD) exchange rate on economic growth and the environment in the United States," Energy Economics, Elsevier, vol. 64(C), pages 170-176.
    8. Manne, Alan & Richels, Richard, 2004. "The impact of learning-by-doing on the timing and costs of CO2 abatement," Energy Economics, Elsevier, vol. 26(4), pages 603-619, July.
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    Cited by:

    1. Jae‐Do Song, 2023. "Excessive banking preference in emissions trading," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(1), pages 448-458, January.
    2. Ye Duan & Zenglin Han & Hailin Mu & Jun Yang & Yonghua Li, 2019. "Research on the Impact of Various Emission Reduction Policies on China’s Iron and Steel Industry Production and Economic Level under the Carbon Trading Mechanism," Energies, MDPI, vol. 12(9), pages 1-26, April.
    3. Fei Ye & Lixu Li & Zhiqiang Wang & Yina Li, 2018. "An Asymmetric Nash Bargaining Model for Carbon Emission Quota Allocation among Industries: Evidence from Guangdong Province, China," Sustainability, MDPI, vol. 10(11), pages 1-18, November.
    4. Kim, Pyung & Bae, Hyunhoe, 2022. "Do firms respond differently to the carbon pricing by industrial sector? How and why? A comparison between manufacturing and electricity generation sectors using firm-level panel data in Korea," Energy Policy, Elsevier, vol. 162(C).
    5. Jae-Do Song & Young-Hwan Ahn, 2021. "Price Discovery of Consignment Auctions for Emission Permits," Energies, MDPI, vol. 14(21), pages 1-13, October.

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