Energy and carbon prices: a comparison of interactions in the European Union Emissions Trading Scheme and the Western Climate Initiative market

We provide a comparative analysis of how short-run variations in carbon and energy prices relate to each other in the emerging greenhouse gas market in California (Western Climate Initiative [WCI], and the European Union Emission Trading Scheme [EU ETS]). We characterize the relationship between carbon, gas, coal, electricity and gasoline prices and an indicator for economic activity, and present a first analysis of carbon prices in the WCI. We also provide a comparative analysis of the structures of the two markets. We estimate a vector autoregressive model and the impulse--response functions. Our main findings show a positive impact from a carbon shock toward electricity, in both markets, but larger in the WCI electricity price, indicating more efficiency. We propose that the widening of carbon market sectors, namely fuels transport and electricity imports, may contribute to this result. To conclude, the research shows significant and coherent relations between variables in WCI, which demonstrate some degree of success for a first year in operation. Reversely, the EU ETS should complete its intended market reform, to allow for more impact of the carbon price. Finally, in both markets, there is no evidence of carbon pricing depleting economic activity.

Slip flows of Newtonian and viscoelastic fluids in a 4:1 contraction

This work presents a numerical study of the 4:1 planar contraction flow of a viscoelastic fluid described by the simplified Phan-Thien–Tanner model under the influence of slip boundary conditions at the channel walls. The linear Navier slip law was considered with the dimensionless slip coefficient varying in the range ½0; 4500. The simulations were carried out for a small constant Reynolds number of 0.04 and Deborah numbers (De) varying between 0 and 5. Convergence could not be achieved for higher values of the Deborah number, especially for large values of the slip coefficient, due to the large stress gradients near the singularity of the reentrant corner. Increasing the slip coefficient leads to the formation of two vortices, a corner and a lip vortex. The lip vortex grows with increasing slip until it absorbs the corner vortex, creating a single large vortex that continues to increase in size and intensity. In the range De = 3–5 no lip vortex was formed. The flow is characterized in detail for De ¼ 1 as function of the slip coefficient, while for the remaining De only the main features are shown for specific values of the slip coefficient.