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An Estimation of Market-Based Carbon-Emission Prices Using Comparative Analogy: A Korean Case

Author

Listed:
  • Saedaseul Moon
  • Deok-Joo Lee
  • Taegu Kim
  • Kyung-Taek Kim

Abstract

In 2015, Korea became one of the pioneering countries to implement ETS nationwide in Asia. The purpose of this paper is to estimate the market-based prices of carbon credits in Korea by using a comparative analogy approach. In this paper, the comparative analogy is applied as follows: Based on the assumption that the factors affecting carbon prices would be same with the those of EU ETS which is the most matured market in the world, we attempt to estimate the market-based carbon prices of Korea with the estimation model obtained by using the data from EU ETS. After estimating the market-based price of carbon in Korea, we compare the estimated price to the actual observed prices and analyze the reasons why there existed the gap between both prices. Furthermore, we examine the properties of the estimated market-based price with respect to the changes of factors affecting the carbon price through sensitivity analysis

Suggested Citation

  • Saedaseul Moon & Deok-Joo Lee & Taegu Kim & Kyung-Taek Kim, 2019. "An Estimation of Market-Based Carbon-Emission Prices Using Comparative Analogy: A Korean Case," The Energy Journal, , vol. 40(1_suppl), pages 259-276, June.
    • Handle: RePEc:sae:enejou:v:40:y:2019:i:1_suppl:p:259-276
    DOI: 10.5547/01956574.40.SI1.smoo
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    References listed on IDEAS

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    1. Emilie Alberola & Benoît Chèze & Julien Chevallier, 2008. "The EU Emissions Trading Scheme : Disentangling the Effects of Industrial Production and CO2 Emissions on Carbon Prices," EconomiX Working Papers 2008-12, University of Paris Nanterre, EconomiX.
    2. 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.
    3. repec:dau:papers:123456789/5269 is not listed on IDEAS
    4. repec:dau:papers:123456789/4210 is not listed on IDEAS
    5. Emilic Alberola & Julien Chevallier & Benoit Cheze, 2008. "The EU Emissions Trading Scheme: the Effects of Industrial Production and CO2 Emissions on Carbon Prices," Economie Internationale, CEPII research center, issue 116, pages 93-126.
    6. repec:dau:papers:123456789/4223 is not listed on IDEAS
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