Max Fehr

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This paper is concerned with the mathematical analysis of emissions markets. We review the existing quantitative analyses on the subject and introduce some of the mathematical challenges posed by the implementation of the new phase of the European Union Emissions Trading Scheme as well as the cap-and-trade schemes touted by the US, Canada, Australia and(More)
To meet the targets of the Kyoto Protocol, European Union has established the European Emission Trading Scheme, a mandatory market for carbon emission allowances. This regulatory framework has introduced a market for emission allowances and created a variety of emission-related financial instruments. In this work, we show that the economic mechanism of(More)
The present paper is a contribution to the quantitative analysis of the cap-and-trade schemes touted by some as the regulation of choice in the market based approach to climate change. Its main thrust is twofold. Firstly we prove that the well known social optimality of cap-and-trade schemes, which is the main reason for these schemes to be implemented, can(More)
In this paper, we propose an equilibrium model for the joint price formation of allowances issued by regulators in the framework of a cap-and-trade scheme such as the European Union Emissions Trading Scheme (EU ETS) and offset certificates such as CERs generated within the framework of the Clean Development Mechanism (CDM) or the Joint Implementation (JI)(More)
Since the 1990s power markets are being restructured worldwide and nowadays electrical power is traded as a commodity. The liberalization and with it the uncertainty in gas, fuel and electrical power prices requires an effective management of production facilities and financial contracts. Thereby derivatives build essential instruments to exchange volume as(More)