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Is there a room for a "CO2 Central Bank"?.



DE PERTHUIS.Christian.ppt Is there a room for a CO2 Central Bank ? Chris5an de Perthuis Professor at Paris-­‐Dauphine University European University Ins1tute Florence, May 12th, 2011 2 Outline 1.  Do we need more carbon market regula1on ? 2.  The components of a carbon market regula1on 3.  Enhancing Carbon market security 4.  Promo1ng Carbon Market transparency 5.  Helping Carbon Price discovery : the case for a CO2 Central Bank. ANNEXES 3 Do we need more carbon market regula5on? (1) §  According to textbook theory, the public authority sets up the cap => trading will spontaneously emerge §  The European carbon market is func1oning: –  For almost 12000 industrial plants, emiVng CO2 now has a cost –  This cost is an interna1onal reference –  It reflects market fundamentals (See Graph 1 in annex). §  A large part of the market is already under regula1on : –  The largest part of deriva1ves transac1ons (80-­‐90% of the market) is already under European financial regula1on –  There will be significant extension of harmonized regula1on as of Phase 3 with large scale auc1ons on the primary market. §  VAT frauds or Cyber criminality are not specific to carbon markets 4 Do we need more carbon market regula5on? (2) §  The EU carbon market was essen1ally created as a result of a regula1on aimed

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