Transitioning to a decarbonized economy is at the top of political agendas worldwide. Countries introduce new regulations to fight climate change risk. lmportant examples are market-based instruments such as cap-and-trade systems for greenhouse gases, like the European Union Emission Trading System. Prices in these markets are driven not only by underlying fundamentals but also in a non-trivial way by policy decisions. However, there is huge uncertainty not only with regard to the climate change and the economic consequences thereof (climate risk), but also with regard to the regulatory rules and the timing of such policies (climate policy uncertainty). n this context, however, existing pricing methods mostly abstract from the induced policy uncertainty.
Project status |
granted |
Project time |
01.10.2026- 30.09.2030 |
Funding source |
DFG - Research Unit |
Project number |
BR 2923/3-1 |
Keywords |
Unsicherheit; Klimapolitik; Finanzmärkte |