A Comparison of Reduced-Form Permit Price Models and their Empirical Performances
Author(s)Taschini, Luca; Grüll, Georg
Equilibrium models have been proposed in literature with the aim of describing the evolution of the price of emission permits. This paper derives _rst estimation methods for the calibration of three competing equilibrium models. Second, it demonstrates how their reduced-form versions are inter-related. Third, by means of calibration to historical data, it is shown how these reduced-form models perform in the current price-evolution framework also with respect to standard continuous time stochastic models.
MIT Center for Energy and Environmental Policy Research