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Dr Luca Taschini
Assistant Professorial Research Fellow
Luca is an economist, working at the intersection of environmental economics, energy markets, and industrial organisation. His current research projects include work on market-based instruments and climate finance.
Background
Luca completed his formal training in economics in Italy. He holds a PhD in Economics from the University of Zurich. He is also an alumnus of the Joint Program on the Science and Policy of Global Change (MIT) and is a visiting scholar at the Research Center for Sustainability Science, Ritsumeikan University in Japan.
Research interests
- Permits market design, price manipulation and participation restrictions;
- System linking and networking;
- Investment decisions under uncertainty;
- Energy economics;
- Real options;
- Experimental markets for emission permits.
Prospective PhD students
Luca welcomes enquiries from prospective PhD students with shared interests, and strong backgrounds in economics and statistics.
– Visit the ‘Study with us’ page for further information on applying to be a PhD student with us.
Comovement and the financialization of commodities
We investigate how the correlations amongst commodity futures have changed since the early 2000s. Using data from 1998 to 2011, we examine differences in the dependence structure of index and … read more »
Emissions trading systems with cap adjustments
Emissions Trading Systems (ETSs) with fixed caps lack provisions to address systematic imbalances in the supply and demand of permits in response to economic shocks. This paper proposes a new mechanism which adjusts the allocation of permits based on the current bank of permits to create a dynamic system of permit allocation. read more »
Getting more ‘carbon bang’ for your ‘buck’ in Acre State, Brazil
Acre State in Brazil is at the forefront of efforts to institutionalize jurisdictional-scale policies that aim to reduce emissions from deforestation and forest degradation (REDD+). Given limited REDD+ funds and … read more »
Emissions trading systems with cap adjustments
This working paper analyses the design of the market stability reserve proposed as part of the reform of the European Union emissions trading system. read more »
Carbon dating: When is it beneficial to link ETSs?
We propose a theory of the economic advantage (EA) of regulating carbon emissions by linking two emissions trading systems versus operating them under autarky. Linking implies that permits issued in … read more »
Renewables, allowances markets, and capacity expansion in energy-only markets
We investigate the combined effect of an Emission Trading System (ETS) and renewable energy sources on electricity generation investment in energy-only markets. We propose a simple representation of the capacity … read more »
Understanding the demand for REDD+ credits
Laing, Timothy, Taschini, Luca and Palmer, Charles (2016). In: Environmental Conservation
2015
Understanding the demand for REDD+ credits
REDD (Reducing emissions from deforestation and forest degradation), broadened to REDD+, has recently emerged as a potentially important component of the global policy mix to mitigate climate change. In this … read more »
Emissions Markets and Products
Chapter 5 in Andrea Roncoroni, Gianluca Fusai, and Mark Cummins (eds.) Handbook of Multi-Commodity Markets and Products: Structuring, Trading and Risk Management. Wiley, 2015 Link to publisher
Energy and carbon markets in Europe: Larger or smaller markets?
Presentation given at the Cumberland Lodge Workshop organised by the European Institute at the LSE. read more »
Conservation payments under uncertainty
The decision of whether to retain forest or convert to another land use is affected by uncertainty over future land use returns. This paper examines the design of conservation payments to landowners under uncertainty. Payments are either indexed to the returns from deforestation (agriculture), or to a market value associated with forest nonuse benefits. Payment size depends on the degree of correlation between payments and agricultural returns, and their relative volatility. Market-based payments for reducing emissions from deforestation and degradation (REDD) are simulated for Brazilian soybean growers. Payments indexed to carbon prices are larger than those indexed to international soybean prices. (JEL Q23, Q24) read more »
2014
FP7 Entracte project
The second ENTRACTE newsletter reflects the contribution of the GRI/LSE research project for a functioning climate policy taking into account a careful design. It gives an overview about recent research … read more »
The Reform of the EU ETS: A Responsiveness Mechanism
Conference presentation presented at the Emissions Trading in the 2030 Framework conference at Universite Paris Dauphine, September 3, 2014 read more »
Experimental comparison between markets on dynamic permit trading and investment in irreversible abatement with and without non-regulated companies
This paper examines the investment strategies of compliance companies in irreversible abatement technologies and the environmental achievements of the system in an inter-temporal cap-and-trade market using laboratory experiments. The experimental … read more »
2013
Environmental finance and investments
Environmental finance and investments Chesney, M., Gheyssens, J., and Taschini, L. 2013. Springer: UK. This book is intended to provide students and practitioners the knowledge and theoretical tools they need … read more »
Experimental comparison between markets on dynamic permit trading and investment in irreversible abatement with and without non-regulated companies
This paper examines the investment strategies of compliance companies in irreversible abatement technologies and the environmental achievements of the system in an inter-temporal cap-and-trade market using laboratory experiments. The … read more »
2012
The endogenous price dynamics of emission allowances and an application to CO2 option pricing
Market mechanisms are increasingly being used as a tool for allocating somewhat scarce but unpriced rights and resources, and the European Emission Trading Scheme is an example. By means … read more »
Linking emission trading schemes
In principle, linking emission trading schemes would favour the depletion of low-cost abatement opportunities that are geographically spread over the globe. However, this would only be possible if the … read more »
Cost-effective payments for reducing emissions from deforestation under uncertainty
The paper analyses the implications of landowners’ option values in land allocation and derives policy recommendations for payments for Reducing Emissions from Deforestation and Forest Degradation … read more »
2011
Pollution permits, strategic trading and dynamic technology adoption
This paper analyses the dynamic incentives for technology adoption under a transferable permits system, which allows for strategic trading on the permit market. Initially, firms can … read more »
The role of stocks and shocks concepts in the debate over price vs. quantity
Two simple examples are constructed that help to clarify the role of a key assumption in the analysis of price or quantity controls of greenhouse gases … read more »
Experimental comparison between markets on dynamic permit trading and investment in irreversible abatement with and without nonregulated companies
This paper examines the investment strategies of regulated companies in abatement technologies, market participants’ trading behaviours, and the liquidity level in an inter-temporal cap and trade … read more »
Cap-and-trade properties under different hybrid scheme designs
This paper examines the key design mechanisms of existing and proposed cap-and-trade markets. First, it is shown that the hybrid systems under investigation (price floor using a minimum price … read more »
2010
Environmental economics and modelling marketable permits
This paper reviews fundamental concepts in environmental economics and explores theoretical results regarding the choice of the key policy instruments for the control of externalities: taxes, subsidies and marketable … read more »
Cap-and-trade properties under different hybrid scheme designs
This paper examines the key design mechanisms of existing and proposed cap-and-trade markets. First, it is shown that the hybrid systems under investigation (price floor using a minimum price … read more »
Cap-and-trade properties under different hybrid scheme designs
We examine the key design mechanisms of existing and proposed cap-and-trade markets. First, it is shown that the hybrid systems under investigation (price floor using a … read more »
Environmental economics and modelling marketable permits
We review fundamental concepts in environmental economics and explore theoretical results regarding the choice of the key policy instruments for the control of externalities: taxes, subsidies … read more »
The real option to fuel switch in the presence of expected windfall profits under the EU Emission Trading Scheme
This paper develops a simple model to evaluate the value and the activation frequencies of a generation system consisting of coal-fired and a gas-fired power plants using a real … read more »
Submission to the inquiry by the Energy and Climate Change Committee inquiry on ‘Leaving the EU: implications for UK climate policy’
This submission explores whether the UK should seek to stay in or leave the EU emissions trading system (EU ETS) as part of Brexit negotiations. It finds that leaving the EU ETS would result in the UK losing access to low-cost emission reduction opportunities that are only available in what is currently the world’s largest carbon market. It also highlights that leaving the EU ETS to link with other existing or planned emissions trading systems could generate significant administrative costs that potentially offset any economic benefits. read more »
2015
Is a Market Stability Reserve likely to improve the functioning of the EU ETS? Evidence from a model comparison exercise
Report explores what market and regulatory failures could inhibit the functioning of the EU ETS and result in deviations from the efficient abatement pathway. read more »
2014
Bridging the REDD+ Finance Gap
Ruben Lubowski, Alexander Golub, Rowan Parkhouse and Luca Taschini (2014) Chapter in ‘IETA GHG Market Report 2014’. External link to report
Submission to the inquiry by the House of Commons Select Committee on Energy and Climate Change on ‘Linking Emissions Trading Systems’
Paper looks at what are the main challenges to linking emissions trading systems and what are the consequences of failing to address them adequately. read more »
System responsiveness and the European Union Emissions Trading System
This paper argues in favour of a reform of the European Union Emissions Trading System (EU ETS) that makes the system more responsive to unexpected price shocks. The paper proposed … read more »
2013
Options for structural measures to improve the European Union Emissions Trading System: response to a European Commission consultation
Main points The impact of ‘back-loading’, a short-term measure, will be limited. ‘Back-loading’ is unlikely to have a significant impact on the price of emissions allowances, unless the ‘back-loaded’ allowances … read more »
2011
The 'surrender charge' on international units in the Australian ETS
Cameron Hepburn, Sarah Chapman, Baran Doda, Chris Duffy, Samuel Fankhauser, James Rydge, Kathryn Smith, Luca Taschini and Alessandro Vitelli
Here’s a way to make carbon markets work better
Luca Taschini and Baran Doda explain how carbon markets could play a crucial role in delivering promises made at the Paris climate conference. read more »
2015
Reform to European emissions trading is welcome, but the devil lies in the detail
Research fellow, Luca Taschini, looks at the 'nitty gritty' of EU ETS reform. read more »
Urgent market stability reserve: Important for clean energy investment
This column discusses how the Market Stability Reserve should be designed and whether it could improve the emissions trading. read more »
2014
EU plans to revive lifeless carbon market
EU leaders will try to resuscitate the Emissions Trading System, the world’s biggest cap-and-trade market, and redeploy it on the frontline of the battle against climate change. read more »
European Commission resists calls for carbon ‘central bank’
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The European Commission has resisted calls for a carbon “central bank” to revive Europe’s moribund emissions trading system but is poised to unveil a less ambitious plan to fix flaws in a market that has foundered since the global financial crisis slashed prices. read more »
2014
Reform of the EU ETS: Assessment of different "responsive" mechanisms
Speaker: Luca Taschini
2010
Current Challenges in the Carbon Markets
Current Challenges in the Carbon Markets read more »
2015
Emissions Markets and Products
Chapter 5 in Andrea Roncoroni, Gianluca Fusai, and Mark Cummins (eds.) Handbook of Multi-Commodity Markets and Products: Structuring, Trading and Risk Management. Wiley, 2015 Link to publisher
2013
Environmental finance and investments
Environmental finance and investments Chesney, M., Gheyssens, J., and Taschini, L. 2013. Springer: UK. This book is intended to provide students and practitioners the knowledge and theoretical tools they need … read more »
