Correlations and Volatility Spillovers between the Carbon Trading Price and Bunker Index for the Maritime Industry
Journal Title: Review of Economics & Finance - Year 2016, Vol 6, Issue 4
Abstract
This research intends to investigate the relationship between carbon trading price and the bunker fuel index, with inputs from reviewing current greenhouse gas (GHG) mitigation management and financial measures, for the purpose of evaluating the cost implications of carbon price on the maritime industry. The Dynamic Condition Correlation Model (DCC Model) is applied for evaluating the variations of the carbon trading price and the bunker fuel index, in the light of an analysis of the proportion of fuel hedging to be used and the hedging performance. With the results of hedging performance, the cost implications of GHG mitigation management measures are investigated.
Authors and Affiliations
Ming-Tao Chou, Cherie Lu
Keywords
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