Carbon Markets, 1st ed. 2018 Microstructure, Pricing and Policy

This book explores the microstructure of carbon markets and the pricing of carbon financial instruments generally. It provides a critical microstructure analysis of the EU Emissions Trading Scheme (EU-ETS), and also examines the theoretical and related market design issues affecting emissions trading schemes. Individual chapters analyse how intraday pricing evolves in carbon markets, the price impact of block trades in carbon financial instruments and their determinants, short and long-term liquidity effects in carbon markets, and the links between carbon market liquidity and efficiency. The aforementioned issues are explored using case studies of two major trading platforms operating within the EU-ETS. The book concludes by focusing on future policy and regulatory challenges in carbon markets, especially with respect to addressing pricing volatility challenges.

Gbenga Ibikunle is an Associate Professor of Financial Markets at the University of Edinburgh, UK and a Fellow at the Capital Markets Cooperative Research Centre, Australia and the University of St. Andrew's Centre for Responsible Banking and Finance, UK. He has also held visiting research positions with the UK’s financial markets regulator, the Financial Conduct Authority, and several leading universities around the world. Gbenga’s work on the microstructure of financial markets are regularly cited in publications/articles by market regulators and the leading international financial economics news media. His papers have been published extensively in internationally recognised finance, economics and management academic journals.

Andros Gregoriou is a Professor of Finance and the Head of the Economics and Finance Division of the Business School at the University of Brighton, U.K. Andros has held senior academic positions in various academic institutions throughout his career including the University of Hull, Brunel University, and the University of East Anglia, U.K. A leading authority in finance, he has published a significant number of research papers in internationally recognised journals and generated over £5 million in research funding. He is a regular consultant for the CFA and the London Stock Exchange.

Explores the market microstructure of carbon markets

Analyses the pricing of carbon financial instruments

Features a case study of a major EU-ETS trading platform

Features policy recommendations for improving the pricing of carbon financial instruments