- Transaction costs played an important role in the initial years of the EU ETS and were significant in explaining why some ETS firms did not participate in the European emission trading market and chose to trade allowances individually via third parties.
- It was also evident that the importance of transaction costs was declining over time.
- The study also found evidence that supports the concerns raised by the European Commission that transaction costs might be excessive for smaller participants.
Photo by: James George from Envirobeat
Read more about the conference: University of California, Berkeley
Read the CERE working paper: "Firm Trading Behaviour and Transaction Costs in the European Union's Emission Trading System (EU ETS): An Empirical Assessment" authored by Jūrate Jaraitė and Andrius Kažukauskas.