Why do emitters trade carbon permits ? Firm-level evidence from the European emission trading scheme

  title={Why do emitters trade carbon permits ? Firm-level evidence from the European emission trading scheme},
  author={Aleksandar Zaklan},
The creation of the EU’s Emission Trading Scheme (EU ETS) has turned the right to emit CO2 into a positively priced intermediate good for the affected firms. Firms thus face the decision whether to source compliance with the EU ETS within their boundaries or to acquire it through the permit trade. However, a combination of internal abatement, free permit allocation and flexibility to shift the use of their allocation across time creates opportunities to achieve compliance with the EU ETS… CONTINUE READING

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