International Journal of Global Energy Issues http://www.inderscience.com/browse/index.php?journalID=13&year=2011&vol=35&issue=2/3/4 Inderscience Publishers Ltd en-uk International Journal of Global Energy Issues 0954-7118 1741-5128 © 2011 Inderscience Publishers Ltd editor@inderscience.com https://www.inderscience.com/images/files/coverImgs/ijgei_scoverijgei.jpg http://www.inderscience.com/browse/index.php?journalID=13&year=2011&vol=35&issue=2/3/4 http://www.inderscience.com/link.php?id=45025 This paper discusses the relation of spot and futures CO<SUB align="right">2 allowances, used to model and test forward premium and convenience yield (CY) concepts during 2005-2011. We analyse allowances futures from an ex-post perspective and find positive forward premia for both Phase I and Phase II and for different European markets: European Energy Exchange (EEX) and European Climate Exchange (ECX), indicating the prevalence of contango, for the majority of the futures contracts under analysis. When testing for factors influencing both the forward premium and the convenience yield we see a negative influence of spot CO<SUB align="right">2 price volatility in EEX, but for ECX results are dubious with respect to the negative influence of volatility over the convenience yield. Results indicate that the convenience yield positively influences the forward premium, while being positively influenced by the spot, being results independent of the volatility forecast used and important for risk management purposes. Links between spot and futures allowances: ECX and EEX markets comparison
Carlos Pinho; Mara Madaleno
International Journal of Global Energy Issues, Vol. 35, No. 2/3/4 (2011) pp. 101 - 131
This paper discusses the relation of spot and futures CO<SUB align="right">2 allowances, used to model and test forward premium and convenience yield (CY) concepts during 2005-2011. We analyse allowances futures from an ex-post perspective and find positive forward premia for both Phase I and Phase II and for different European markets: European Energy Exchange (EEX) and European Climate Exchange (ECX), indicating the prevalence of contango, for the majority of the futures contracts under analysis. When testing for factors influencing both the forward premium and the convenience yield we see a negative influence of spot CO<SUB align="right">2 price volatility in EEX, but for ECX results are dubious with respect to the negative influence of volatility over the convenience yield. Results indicate that the convenience yield positively influences the forward premium, while being positively influenced by the spot, being results independent of the volatility forecast used and important for risk management purposes.

]]> 10.1504/IJGEI.2011.045025 International Journal of Global Energy Issues, Vol. 35, No. 2/3/4 (2011) pp. 101 - 131 Carlos Pinho; Mara Madaleno Department of Economics, Management and Industrial Engineering (DEGEI), Unit Research in Governance, Competitiveness and Public Politics (GOVCOPP), Universidade de Aveiro, Campus Universitário de Santiago, 3810-193 Aveiro, Portugal. ' Department of Economics, Management and Industrial Engineering (DEGEI), Unit Research in Governance, Competitiveness and Public Politics (GOVCOPP), Universidade de Aveiro, Campus Universitário de Santiago, 3810-193 Aveiro, Portugal CO2 emission allowances EU ETS convenience yield risk premium carbon emissions carbon dioxide European Energy Exchange EEX European Climate Exchange ECX price volatility risk management carbon trading emissions trading. 2012-01-21T23:20:50-05:00 35 2/3/4 101 131 2012-01-21T23:20:50-05:00 http://www.inderscience.com/link.php?id=45026 By proposing the hypotheses for carbon price volatility, this paper uses variance ratio and Ensemble Empirical Mode Decomposition (EEMD) to analyse the carbon price. Results show that carbon market is temperature-sensitive, affected by seasonal changes, which presents a style of movement amplitude; carbon price is affected by the market mechanism at a high frequency, with the duration being less than 15 weeks and amplitudes less than 5 euros; heterogeneity environment has an impact on carbon price at a low frequency, the duration lasting more than 34 weeks or even more and amplitudes more than 10 euros or higher. Meanwhile, historical carbon price change shows the long-term trend declines gradually since 2005 from 18 to 16 euros per ton. The continuing declining trend agrees with special events by time. Our research explores the reasons of carbon price volatility and some recommendations are given trying to regulate carbon market. How does carbon price change? Evidences from EU ETS
Zhen-Hua Feng; Chun-Feng Liu; Yi-Ming Wei
International Journal of Global Energy Issues, Vol. 35, No. 2/3/4 (2011) pp. 132 - 144
By proposing the hypotheses for carbon price volatility, this paper uses variance ratio and Ensemble Empirical Mode Decomposition (EEMD) to analyse the carbon price. Results show that carbon market is temperature-sensitive, affected by seasonal changes, which presents a style of movement amplitude; carbon price is affected by the market mechanism at a high frequency, with the duration being less than 15 weeks and amplitudes less than 5 euros; heterogeneity environment has an impact on carbon price at a low frequency, the duration lasting more than 34 weeks or even more and amplitudes more than 10 euros or higher. Meanwhile, historical carbon price change shows the long-term trend declines gradually since 2005 from 18 to 16 euros per ton. The continuing declining trend agrees with special events by time. Our research explores the reasons of carbon price volatility and some recommendations are given trying to regulate carbon market.

]]> 10.1504/IJGEI.2011.045026 International Journal of Global Energy Issues, Vol. 35, No. 2/3/4 (2011) pp. 132 - 144 Zhen-Hua Feng; Chun-Feng Liu; Yi-Ming Wei School of Management, University of Science and Technology of China, Hefei 230026, China; Center for Energy and Environmental Policy Research, Beijing Institute of Technology, Beijing 100081, China. ' Center for Energy and Environmental Policy Research, Beijing Institute of Technology, Beijing 100081, China; School of Management and Economics, Beijing Institute of Technology, Beijing 100081, China. ' Center for Energy and Environmental Policy Research, Beijing Institute of Technology, Beijing 100081, China; School of Management and Economics, Beijing Institute of Technology, Beijing 100081, China carbon price EEMD ensemble empirical mode decomposition variance ratio price volatility temperature sensitivity EU ETS carbon trading seasonal changes carbon market emissions trading carbon emissions CO2 carbon dioxide. 2012-01-21T23:20:50-05:00 35 2/3/4 132 144 2012-01-21T23:20:50-05:00 http://www.inderscience.com/link.php?id=45027 This paper employs the Extreme Value Theory (EVT) to measure the 'Value at Risk' (VaR) of EUA futures prices. The results show that during the sample period: first, the EVT approach can be used to reliably measure the extreme risk of carbon futures markets of the European Union Emissions Trading Scheme, both for Phase I and Phase II. Second, the downside extreme risk of carbon futures market outweighs the upside risk, with evident asymmetric features. Moreover, the average VaR of carbon futures contract DEC10 proves much less than that of contract DEC07 during the sample period. Estimating the 'value at risk' of EUA futures prices based on the extreme value theory
Zhi-Fu Mi; Yue-Jun Zhang
International Journal of Global Energy Issues, Vol. 35, No. 2/3/4 (2011) pp. 145 - 157
This paper employs the Extreme Value Theory (EVT) to measure the 'Value at Risk' (VaR) of EUA futures prices. The results show that during the sample period: first, the EVT approach can be used to reliably measure the extreme risk of carbon futures markets of the European Union Emissions Trading Scheme, both for Phase I and Phase II. Second, the downside extreme risk of carbon futures market outweighs the upside risk, with evident asymmetric features. Moreover, the average VaR of carbon futures contract DEC10 proves much less than that of contract DEC07 during the sample period.

]]> 10.1504/IJGEI.2011.045027 International Journal of Global Energy Issues, Vol. 35, No. 2/3/4 (2011) pp. 145 - 157 Zhi-Fu Mi; Yue-Jun Zhang School of Management and Economics, Beijing Institute of Technology, Beijing 100081, China; Center for Energy and Environmental Policy Research, Beijing Institute of Technology, Beijing 100081, China. ' School of Management and Economics, Beijing Institute of Technology, Beijing 100081, China; Center for Energy and Environmental Policy Research, Beijing Institute of Technology, Beijing 100081, China EU ETS European Union Emissions Trading Scheme EVT extreme value theory VaR value at risk carbon market carbon trading carbon emissions CO2 carbon dioxide carbon futures. 2012-01-21T23:20:50-05:00 35 2/3/4 145 157 2012-01-21T23:20:50-05:00 http://www.inderscience.com/link.php?id=45028 Since the launch of the European Union Emission Trading Scheme (EU ETS), the interest in the trade of EUAs is constantly increasing among academics and market participants. The objective of this paper is twofold: (a) a detailed description of this new market is provided for portfolio managers and (b) a comprehensive study of the implications of including Phase II EUAs in diversified portfolios is undertaken using as expected returns both historical and risk-adjusted returns. The results show that the opportunity set for investors increases when short positions in Phase II EUAs are taken. CO2 prices and portfolio management
Maria Mansanet-Bataller; Angel Pardo
International Journal of Global Energy Issues, Vol. 35, No. 2/3/4 (2011) pp. 158 - 177
Since the launch of the European Union Emission Trading Scheme (EU ETS), the interest in the trade of EUAs is constantly increasing among academics and market participants. The objective of this paper is twofold: (a) a detailed description of this new market is provided for portfolio managers and (b) a comprehensive study of the implications of including Phase II EUAs in diversified portfolios is undertaken using as expected returns both historical and risk-adjusted returns. The results show that the opportunity set for investors increases when short positions in Phase II EUAs are taken.

]]> 10.1504/IJGEI.2011.045028 International Journal of Global Energy Issues, Vol. 35, No. 2/3/4 (2011) pp. 158 - 177 Maria Mansanet-Bataller; Angel Pardo Department of Financial Economics, Faculty of Economics, University of Valencia, Avda de los Naranjos s/n, 46022 Valencia, Spain. ' Department of Financial Economics, Faculty of Economics, University of Valencia, Avda de los Naranjos s/n, 46022 Valencia, Spain CO2 futures carbon futures carbon market portfolio management short positions carbon emissions emissions trading carbon trading. 2012-01-21T23:20:50-05:00 35 2/3/4 158 177 2012-01-21T23:20:50-05:00 http://www.inderscience.com/link.php?id=45029 The creation of the EU ETS led to changes in the merit order of the different plants competing on the electricity grid, and in the fuel-switching opportunities in the UK. This country has the greatest potential for CO<SUB align="right">2 emissions reduction through fuel-switching within the EU, thanks to its suitable energy mix (39% of coal and 36% of natural gas in 2007). Through the modelling of the UK power system with the E-Simulate model, our central contribution documents that fuel-switching did occur in the UK as a consequence of the EU ETS: 20.1 Mton in 2005, 7.8 Mton in 2006, 0.52 Mton in 2007, and 14.3 Mton in 2008. We assess the relative contribution of different factors (carbon price, fuel prices and load in the power sector) to CO<SUB align="right">2 emissions abatement by disentangling the impacts coming from the EU ETS, relative fuel prices variation, and with a 'switching band' analysis. CO2 abatement opportunity in the UK through fuel-switching under the EU ETS (2005-2008): evidence from the E-Simulate model
Emeric Lujan; Erik Delarue; Julien Chevallier; William D'haeseleer
International Journal of Global Energy Issues, Vol. 35, No. 2/3/4 (2011) pp. 178 - 214
The creation of the EU ETS led to changes in the merit order of the different plants competing on the electricity grid, and in the fuel-switching opportunities in the UK. This country has the greatest potential for CO<SUB align="right">2 emissions reduction through fuel-switching within the EU, thanks to its suitable energy mix (39% of coal and 36% of natural gas in 2007). Through the modelling of the UK power system with the E-Simulate model, our central contribution documents that fuel-switching did occur in the UK as a consequence of the EU ETS: 20.1 Mton in 2005, 7.8 Mton in 2006, 0.52 Mton in 2007, and 14.3 Mton in 2008. We assess the relative contribution of different factors (carbon price, fuel prices and load in the power sector) to CO<SUB align="right">2 emissions abatement by disentangling the impacts coming from the EU ETS, relative fuel prices variation, and with a 'switching band' analysis.

]]> 10.1504/IJGEI.2011.045029 International Journal of Global Energy Issues, Vol. 35, No. 2/3/4 (2011) pp. 178 - 214 Emeric Lujan; Erik Delarue; Julien Chevallier; William D'haeseleer Energy Futures Lab, Imperial College London, London SW7 2AZ, UK. ' Division of Applied Mechanics and Energy Conversion, University of Leuven Energy Institute (K.U. Leuven), Celestijnenlaan 300A, 3001 Heverlee, Belgium. ' Place du Marechal de Lattre de Tassigny, Université Paris Dauphine (CGEMP/LEDa), 75775 Paris Cedex 16, France. ' Division of Applied Mechanics and Energy Conversion, University of Leuven Energy Institute (K.U. Leuven), Celestijnenlaan 300A, 3001 Heverlee, Belgium E-Simulate model CO2 emissions abatement switching band carbon emissions carbon dioxide emissions trading fuel switching United Kingdom UK energy mix modelling fuel prices price variation. 2012-01-21T23:20:50-05:00 35 2/3/4 178 214 2012-01-21T23:20:50-05:00 http://www.inderscience.com/link.php?id=45030 With more than half the world's population living in urban areas, cities have become a major source of local and global atmospheric pollution. Originally developed in the 1990s to decrease local pollution, Local Emission Trading Schemes (ETSs) are now emerging as a promising cost-efficient instrument to achieve local GHG emissions reductions. This paper compares four existing city-based ETS covering both local pollutants and greenhouse gases. It identifies common and distinguishing features and assesses the environmental and economic performance of the various existing ETS. Based on this analysis, this paper highlights the factors contributing to the success of local ETS and makes recommendations for future implementation. Finally, this paper underlines that in order to improve the effectiveness of market incentives, the legal nature of tradable credits must be well defined and that overlaps between local ETS and other regulations must be limited. A comparative analysis of city-based emission trading schemes: key design and management factors for environmental cost effectiveness
Gautier Kohler; Benoit Lefèvre
International Journal of Global Energy Issues, Vol. 35, No. 2/3/4 (2011) pp. 215 - 241
With more than half the world's population living in urban areas, cities have become a major source of local and global atmospheric pollution. Originally developed in the 1990s to decrease local pollution, Local Emission Trading Schemes (ETSs) are now emerging as a promising cost-efficient instrument to achieve local GHG emissions reductions. This paper compares four existing city-based ETS covering both local pollutants and greenhouse gases. It identifies common and distinguishing features and assesses the environmental and economic performance of the various existing ETS. Based on this analysis, this paper highlights the factors contributing to the success of local ETS and makes recommendations for future implementation. Finally, this paper underlines that in order to improve the effectiveness of market incentives, the legal nature of tradable credits must be well defined and that overlaps between local ETS and other regulations must be limited.

]]> 10.1504/IJGEI.2011.045030 International Journal of Global Energy Issues, Vol. 35, No. 2/3/4 (2011) pp. 215 - 241 Gautier Kohler; Benoit Lefèvre Iddri, Sciences Po, 41 rue du Four 75006, Paris, France. ' Iddri, Sciences Po, 41 rue du Four 75006, Paris, France climate change local pollution ETS emissions trading scheme cities environmental cost effectiveness air pollution carbon emissions CO2 carbon dioxide GHG emissions greenhouse gases market incentives. 2012-01-21T23:20:50-05:00 35 2/3/4 215 241 2012-01-21T23:20:50-05:00 http://www.inderscience.com/link.php?id=45031 This paper applies insights from behavioural economics literature to design options in climate policy in order to make suggestions on how to create and pass effective climate regulation. It posits that policymakers can have a more comprehensive toolkit for tackling climate change by utilising knowledge of flawed human behaviour. It makes three main suggestions. First, when pricing carbon, the use of policy bundling helps to counter cognitive biases such as 'loss aversion'. Second, financial incentives are required for clean tech and renewable energy sectors to become competitive with traditional energy markets. Third, climate policy needs to target the finance sector, particularly the banking industry, to encourage capital flow to these alternative energy markets. In this way, effective climate policy may have a nudging effect on a spectrum of decision-makers, with the net benefit of facilitating climate change mitigation and timely transition to a low-carbon global economy. Nudging effective climate policy design
Megan Bowman
International Journal of Global Energy Issues, Vol. 35, No. 2/3/4 (2011) pp. 242 - 254
This paper applies insights from behavioural economics literature to design options in climate policy in order to make suggestions on how to create and pass effective climate regulation. It posits that policymakers can have a more comprehensive toolkit for tackling climate change by utilising knowledge of flawed human behaviour. It makes three main suggestions. First, when pricing carbon, the use of policy bundling helps to counter cognitive biases such as 'loss aversion'. Second, financial incentives are required for clean tech and renewable energy sectors to become competitive with traditional energy markets. Third, climate policy needs to target the finance sector, particularly the banking industry, to encourage capital flow to these alternative energy markets. In this way, effective climate policy may have a nudging effect on a spectrum of decision-makers, with the net benefit of facilitating climate change mitigation and timely transition to a low-carbon global economy.

]]> 10.1504/IJGEI.2011.045031 International Journal of Global Energy Issues, Vol. 35, No. 2/3/4 (2011) pp. 242 - 254 Megan Bowman Victoria Law School, Victoria University, Melbourne, Victoria 8001, Australia climate change mitigation climate policy design climate regulation banks finance sector incentives nudges renewable energy clean tech markets carbon price tax emissions trading low carbon economy behavioural economics cognitive psychology biases carbon trading policy bundling financial incentives banking industry clean technology. 2012-01-21T23:20:50-05:00 35 2/3/4 242 254 2012-01-21T23:20:50-05:00 http://www.inderscience.com/link.php?id=45032 Market-based instruments increasingly shape international environmental governance. Against this background, this paper puts forward a conceptual framework on the development of regulated global carbon markets. Regarding the adoption of carbon trading as an instance of wider shifts in governance allows us to benefit from the rich literature on (international) institutional change. At the same time it enables us to integrate existing social science accounts of the construction of carbon markets into a more generic conceptualisation. An analytical framework is suggested that models a set of five (recursively interacting) factors as causes of and influences on the development of international carbon markets: actor interests; power distribution; discourses; institutional dynamics and interaction; and exogenous shocks. The framework is applied to the empirical example of the emerging UNFCCC mechanism for 'Reducing Emissions from Deforestation and Forest Degradation in Developing Countries' (REDD+). Finally, the generalisability of the findings is discussed. Explaining the construction of global carbon markets: REDD+ as a test case?
Franziska Wolff
International Journal of Global Energy Issues, Vol. 35, No. 2/3/4 (2011) pp. 255 - 274
Market-based instruments increasingly shape international environmental governance. Against this background, this paper puts forward a conceptual framework on the development of regulated global carbon markets. Regarding the adoption of carbon trading as an instance of wider shifts in governance allows us to benefit from the rich literature on (international) institutional change. At the same time it enables us to integrate existing social science accounts of the construction of carbon markets into a more generic conceptualisation. An analytical framework is suggested that models a set of five (recursively interacting) factors as causes of and influences on the development of international carbon markets: actor interests; power distribution; discourses; institutional dynamics and interaction; and exogenous shocks. The framework is applied to the empirical example of the emerging UNFCCC mechanism for 'Reducing Emissions from Deforestation and Forest Degradation in Developing Countries' (REDD+). Finally, the generalisability of the findings is discussed.

]]> 10.1504/IJGEI.2011.045032 International Journal of Global Energy Issues, Vol. 35, No. 2/3/4 (2011) pp. 255 - 274 Franziska Wolff Environmental Law & Governance Division, Öko-Institut e.V., Schicklerstr. 5-7, Berlin 10179, Germany carbon markets carbon market development carbon trading emissions trading new institutionalism institutional change regime formation regime change market-based instruments flexible instruments CDM Kyoto Protocol REDD+ deforestation sinks forest degradation developing countries. 2012-01-21T23:20:50-05:00 35 2/3/4 255 274 2012-01-21T23:20:50-05:00 http://www.inderscience.com/link.php?id=45023 In light of the continual substantial divergences between mainstream economics and econophysics in regard to the market efficiency of international oil price volatility, a model based on multifractal detrended fluctuation analysis is built up to conduct an in-depth research into the validity and predictability of the international oil market, using weekly data of spot price indexes in the three international crude oil markets and reflecting the auto-correlation of oil price and speculation of external market. Our empirical results reveal that: (1) statistically, all previous changes in the international oil price are not completely independent; (2) an anti-persistence correlation and memory begins to characterise the international oil market under the influence of a large-scale capital speculation in financial market; (3) the international oil market presents a long-range auto-correlation and memory feature of finance market under the internal and external effects of auto-correlation and capital speculation respectively. Efficient market hypothesis in the international oil price fluctuation: based on the MF-DFA model
Yufeng Chen; Jian Yu
International Journal of Global Energy Issues, Vol. 35, No. 2/3/4 (2011) pp. 275 - 286
In light of the continual substantial divergences between mainstream economics and econophysics in regard to the market efficiency of international oil price volatility, a model based on multifractal detrended fluctuation analysis is built up to conduct an in-depth research into the validity and predictability of the international oil market, using weekly data of spot price indexes in the three international crude oil markets and reflecting the auto-correlation of oil price and speculation of external market. Our empirical results reveal that: (1) statistically, all previous changes in the international oil price are not completely independent; (2) an anti-persistence correlation and memory begins to characterise the international oil market under the influence of a large-scale capital speculation in financial market; (3) the international oil market presents a long-range auto-correlation and memory feature of finance market under the internal and external effects of auto-correlation and capital speculation respectively.

]]> 10.1504/IJGEI.2011.045023 International Journal of Global Energy Issues, Vol. 35, No. 2/3/4 (2011) pp. 275 - 286 Yufeng Chen; Jian Yu School of Economics, Center for Studies of Modern Business, Zhejiang Gongshang University, No. 149, Road Jiaogong, Hangzhou, Zhejiang, 310012, China. ' School of Economics, Anhui University, No. 3, Road Feixi, HeFei, AnHui, 230039, China oil price fluctuation efficient market hypothesis predictability MF-DFA model auto-correlation capital speculation global energy international oil prices price volatility crude oil markets multifractal detrended fluctuation analysis. 2012-01-21T23:20:50-05:00 35 2/3/4 275 286 2012-01-21T23:20:50-05:00 http://www.inderscience.com/link.php?id=45024 A recent review of maintenance literature found that total productive maintenance (TPM), reliability-centred maintenance (RCM), and condition-based maintenance (CBM) were the most popular maintenance management models discussed in academic journals. In this paper, a comprehensive review of these three models is undertaken to identify empirical 'real world' examples of each model being used in industry. Further analysis is provided in the form of authors origin, research method, study country, sector and industry. The paper provides practitioners with a breakdown of the practical applications for each model in industry today, and academics, a point-of-reference for further empirical research efforts. For practitioners seeking to expand their knowledge of a particular model or how a maintenance management model may fit an organisation, listed references have been chosen for their practical links to present day organisations. In regards to the energy sector the review identified a number of power plants with RCM being the dominate maintenance model. In addition, the paper provides readers with a detailed description of the three models reviewed. A review of the three most popular maintenance systems: how well is the energy sector represented?
Kym Fraser; Hans-Henrik Hvolby; Chihiro Watanabe
International Journal of Global Energy Issues, Vol. 35, No. 2/3/4 (2011) pp. 287 - 309
A recent review of maintenance literature found that total productive maintenance (TPM), reliability-centred maintenance (RCM), and condition-based maintenance (CBM) were the most popular maintenance management models discussed in academic journals. In this paper, a comprehensive review of these three models is undertaken to identify empirical 'real world' examples of each model being used in industry. Further analysis is provided in the form of authors origin, research method, study country, sector and industry. The paper provides practitioners with a breakdown of the practical applications for each model in industry today, and academics, a point-of-reference for further empirical research efforts. For practitioners seeking to expand their knowledge of a particular model or how a maintenance management model may fit an organisation, listed references have been chosen for their practical links to present day organisations. In regards to the energy sector the review identified a number of power plants with RCM being the dominate maintenance model. In addition, the paper provides readers with a detailed description of the three models reviewed.

]]> 10.1504/IJGEI.2011.045024 International Journal of Global Energy Issues, Vol. 35, No. 2/3/4 (2011) pp. 287 - 309 Kym Fraser; Hans-Henrik Hvolby; Chihiro Watanabe School of Advanced Manufacturing and Mechanical Engineering, University of South Australia, Mawson Lakes SA 5095, Australia. ' Centre for Logistics, Aalborg University, Fibigerstraede 16, DK 9220 Aalborg, Denmark. ' Department of Industrial Management, Tokyo Seitoku University, 1-7-13 Jijodai Kita-ku, Tokyo 114-0033, Japan total productive maintenance TPM reliability-centred maintenance RCM condition-based maintenance CBM energy sector literature review. 2012-01-21T23:20:50-05:00 35 2/3/4 287 309 2012-01-21T23:20:50-05:00