Luca Taschini
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Office: Tower 3, 10th floor
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Mail: Grantham Research Institute
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London School of Economics
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Houghton St - London WC2A 2AE
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Tel: +44 (0)20 7852 3679
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Email: l.taschini1[at]lse.ac.uk
I am an economist, working mostly on the theory of market-based mechanisms, energy economics, and technology change under uncertainty. My current research aims to understand both theoretically and practically the functioning and design of transferable permits systems, including questions of price containment mechanisms, participation restrictions, the linkage of markets and the investigation of budget-compatible policies able to promote technology change.
Since June 2009, I am a Post-Doc in the Grantham Research Institute on Climate Change and the Environment at the London School of Economics. From September 2009 to January 2010, I was a Visiting Research Fellow at the MIT Joint Program on the Science and Policy of Global Chance, in Boston.
I obtained my Ph.D. from the Swiss Finance Institute at the University of Zurich, working under the supervision of Prof. Dr. Marc Chesney. During my last years at the University of Zurich I was teaching a class on Environmental Finance.
| Working Papers |
“The Endogenous Price Dynamics of Emission Allowances and an Application to CO2 Option Pricing”, (with M. Chesney),
Swiss Finance Institute Research Paper No. 08-02. (download pdf)
Equilibrium price formation in the presence of asymmetric information.
“Reduced-Form Permit Price Models and their Empirical Performances” (with G. Gruell),
MIT CEEPR Working Paper 09-018; Grantham Research Institute Working Paper 33 (download pdf)
Econometric investigation of different reduced-form permit price models.
“Regulated and Non-regulated Companies, Technology Adoption in Experimental Markets for Emission Permits and Options Contracts”, (with M. Chesney, M. Wang),
Grantham Research Institute Working Paper 41;
Center for Climate Change Economics and Policy Working Paper 51. (download pdf) (policy brief)
Analysis of the trading behaviour and investment strategies in abatement technology in an inter-temporal cap-and-trade market using a laboratory setting.
“Stocks & Shocks: A Clarification in the Debate Over Price vs. Quantity Controls for Greenhouse Gases” (with J. E. Parsons),
MIT CEEPR Working Paper 11-002; Grantham Research Institute Working Paper 43;
Center for Climate Change Economics and Policy Working Paper 54. (download pdf)
Two pairs of simple examples that help to clarify the role of a key assumption in the analysis of the price or quantity controls of emissions in the presence of uncertain costs.
“Pollution Permits, Strategic Trading and Dynamic Technology Adoption”, (with S. Moreno-Bromberg) (download pdf)
This paper analyses the dynamic incentives for technology adoption under a transferable permits system, which allows for strategic trading on the permit market.
“Flexibility Premium in Marketable Permits”, in progress.
Quantification of the premium for flexibility embedded in the price of marketable permits.
“The Design of Payments for Avoided Deforestation under Uncertainty: Insights from Real Options Theory”, (with S. Engel, C. Palmer and S. Urech) - in progress.
Application of real options to landowner’s land use decisions under uncertain alternative returns.
| Journal Articles |
“An Econometric Analysis of Emission Allowances Prices”, (with M. Paolella),
Journal of Banking and Finance, Vol 32 (10):2022-2032, 2008.
Swiss Finance Institute Research Paper Nr. 06-26.
(working paper) (link to journal)
Investigation of the statistical distribution of the prices of emission permits. Analysis of the models effectiveness in terms of in-sample and out-of-sample value-at-risk forecasting.
“Entry and Exit Decision Problem with Implementation Delay”, (with M.Costeniuc and M.Schnetzer), Journal of Applied Probability, Vol. 45 (4):1039-1059, 2008.
(working paper) (link to journal)
Study of investment and disinvestment decisions in situations where there is a time lag d > 0 from the time t when the decision is taken to the time t+d when the decision is implemented.
“Environmental Economics and Modelling Marketable Permits”,
Asian-Pacific Financial Markets, Vol. 17 (4):325-343, 2010.
Grantham Research Institute Working Paper 25.
(working paper) (link to journal)
This paper reviews fundamental concepts in environmental economics and explores theoretical results regarding recent attempts at developing stochastic price models for emission permits.
“The Real Option to Fuel Switch in the presence of Expected Windfall Profits under the EU ETS”,
(with S. Urech),
Journal of Energy Markets, Vol. 3 (2):27-47, 2010.
(working paper) (link to journal)
Evaluation of the value and the activation frequencies of a generation system consisting of coal-fired and gas-fired power plants using a real option approach.
“Cap-and-Trade Properties Under Different Hybrid Scheme Designs”, (with G. Gruell),
Journal of Environmental Economics and Management, Vol. 61 (1):107-118, 2011.
Grantham Research Institute Working Paper 26; MIT CEEPR Working Paper 09-019.
(working paper) (link to journal) (policy brief)
This paper examines the key design mechanisms of existing and proposed cap-and-trade markets.
| Other Publications and Permanent Working Papers |
“Linking Emission Trading Schemes” (with G. Gruell),
Brief model free analysis of the permit price convergence between regional emission trading schemes.
