Pass-Through of Emissions Costs in Electricity Markets

• 成果类型: Article
• 署名作者: Fabra, Natalia; Reguant, Mar
• 署名单位: Universidad Carlos III de Madrid
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.104.9.2872
• 发表日期: 2014
• 页码: 2872-2899
• 关键词: STRUCTURAL APPROACH; exchange-rate; COMPETITION; oligopoly; auctions

摘要

We measure the pass-through of emissions costs to electricity prices. We perform both reduced-form and structural estimations based on optimal bidding in this market. Using rich micro-level data, we estimate the channels affecting pass-through in a flexible manner, with minimal functional form assumptions. Contrary to many studies in the general pass-through literature, we find that emissions costs are almost fully passed through to electricity prices. Since electricity is traded through high-frequency auctions for highly inelastic demand, firms have weak incentives to adjust markups after the cost shock. Furthermore, the costs of price adjustment are small.