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Buy or Sell? Hungarian Carbon Credit Trade: Years of Learning

Author

Listed:
  • Lakatos, Mária
  • Karai, Éva

Abstract

From the beginning, Hungary has played an active role in the trade of state-allocated carbon dioxide emission rights within the EU Emissions Trading Scheme. Our study focuses on carbon dioxide credit turnover of Hungarian firms in the period between 2006 and 2010, seeking to explore the impact of credit prices and accounting classification on trading behaviour of unit trade players in Hungary, in the presence of foreign ownership. Concentrated primarily in foreign-owned Hungarian subsidiaries, the transactions were taken from and tested on the basis of the entity-level database in the official EU Registry. Due to the specificities of the Hungarian carbon dioxide units market, i.e. the extremely high proportion of foreign ownership, the carbon credits behaved as special financial assets. The trade of units reflects not only the influence of the Kyoto Protocol, but the reallocation of these resources from subsidiaries to parent companies as well. The sales and purchases are not closely related to compliance-driven or fundamental demand; rather, main directions are defined by intra-group flows.

Suggested Citation

  • Lakatos, Mária & Karai, Éva, 2015. "Buy or Sell? Hungarian Carbon Credit Trade: Years of Learning," Public Finance Quarterly, Corvinus University of Budapest, vol. 60(3), pages 326-341.
    • Handle: RePEc:pfq:journl:v:60:y:2015:i:3:p:326-341
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    File URL: https://unipub.lib.uni-corvinus.hu/8835/
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    References listed on IDEAS

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    1. Bonenti, Francesca & Oggioni, Giorgia & Allevi, Elisabetta & Marangoni, Giacomo, 2013. "Evaluating the EU ETS impacts on profits, investments and prices of the Italian electricity market," Energy Policy, Elsevier, vol. 59(C), pages 242-256.
    2. Vicente Medina & Angel Pardo, 2013. "Is the EUA a new asset class?," Quantitative Finance, Taylor & Francis Journals, vol. 13(4), pages 637-653, March.
    3. Peter Warwick & Chew Ng, 2012. "The ‘Cost’ of Climate Change: How Carbon Emissions Allowances are Accounted for Amongst European Union Companies," Australian Accounting Review, CPA Australia, vol. 22(1), pages 54-67, March.
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    Cited by:

    1. Katalin Hartung, 2017. "Optimal Resource Allocation at the Blue Economy Type of Firms," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 16(3), pages 98-118.

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    More about this item

    Keywords

    carbon dioxide allowance; international accounting; taxation; profit shifting;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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