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CO2 Allowance & Electricity Price Interaction

CO2 Allowance & Electricity Price Interaction
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Edition: 2007
86 pages

With the introduction of CO2 emission constraints on power generators in the European Union, climate policy is starting to have notable effects on energy markets. This paper sheds light on the links between CO2 prices, electricity prices, and electricity costs to industry. It is based on a series of interviews with industrial and electricity stakeholders, as well as a rich literature seeking to estimate the exact effect of CO2 prices on electricity prices.