Prof. Dr. Yves Robinson Kruse-Becher

(in the fields covered by the research center)

1) Speculative price bubbles in the EU Emissions Trading System

Can rapidly rising market prices be explained by demand or supply shocks, or are we facing speculative price bubbles? These different scenarios imply very different policy measures. Classic econometric methods for discriminating between these cases rely on a price comparison and the unobserved fundamental value, the measurability of which represents a major hurdle. This can be addressed by estimating market expectiations and risk premiums using futures contracts.

2) Economic integration of the EU Emissions Trading System with global energy and commodity markets

As a suitable measure to mitigate negative externalities caused by climate change, the EU Emissions Trading System should show a high degree of economic integration with global energy and commodity markets. Such an analysis can help to decide whether to address the climate change with EU ETS or a tax. The empirical study will use the latest econometric methods for market integration, allowing a robust and unbiased analysis and prohibiting a distorted result by neglecting structural instabilities in the market prices.

3) Modeling European CO₂ emissions

Using high-dimensional and temporally disaggregated data, a comprehensive empirical model will be conducted. This will enable a better understanding of the relationship between relatively high-frequency economical variables and annually measured per capita emissions. Moreover, short-term forecasts of emissions for current calendar years will be created and continuously updated. These forecasts can be used in the evaluation of the EU ETS by comparing the expectations regarding the emissions with the expectations regarding the prices for CO₂ certificates.