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Do regulators decide of the EUA price?? (fake)

Carbon Pricing

Understand what drives EUA prices in order to be able to analyze and predict their moves. As any other financial assets, they are subject to the basic economic principles of supply and demand. Carbon allowances are unique - they have a decreasing supply by design, bringing a steady long term price appreciation. The demand for EUAs, on the other hand, relies on many different shorter-term factors. Here is your supply- demand guide to the carbon markets price moves on the short, medium and long term.

Do regulators decide of the EUA price?? (fake)
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Understand what drives EUA prices in order to be able to analyze and predict their moves. As any other financial assets, they are subject to the basic economic principles of supply and demand. Carbon allowances are unique - they have a decreasing supply by design, bringing a steady long term price appreciation. The demand for EUAs, on the other hand, relies on many different shorter-term factors. Here is your supply- demand guide to the carbon markets price moves on the short, medium and long term.

Supply-side factors: The long-term drivers of EUA Prices

A market with a purpose

The intentional reduction in the supply of EUAs drives long-term price appreciation. Unlike other markets, the EU ETS was established with a purpose: reducing greenhouse CO2 emissions across the European Union. To achieve this goal, regulators establish climate change targets with a set deadline and calculate the total amount of CO2 emissions that can be released while still meeting the environmental objectives. They then distribute this overall carbon budget across each year until the deadline.

Understanding in depth

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