Research on the International Carbon Price Driving Factors—A Case Study of the European Union Emission Trading Scheme

The exploration of the driving factors of carbon price has become one of the focuses in the field of energy economics. Relying on the European Union Emission Trading Scheme(EU ETS) allowance futures price 2006—2012, an integrated model of the structure breakpoint test, cointegration technique and ridge regression analysis is used to explore the factors and patterns of carbon price driving factors. The empirical results show that, the Bali action plan in 2007, global financial crisis in 2008 and European debt crisis in 2011 had significant influences on the carbon price, which led to a structural breakpoint of the carbon price respectively. Meantime, a cointegrating relationship existed between the carbon price and its driving factors including energy prices, industrial production and weather. The estimated carbon prices are below equilibrium values, while the future carbon price tends to be undervalued since October 2009.