Authors : Jarmila Zimmermannova and Frantisek Hunka
Abstract: This study is focused on predictions of emission allowances prices within the EU ETS for the purposes of managerial decision making; precisely the study presents possibilities of the EUA auction price development forecasts with application of so called unconventional managerial decision-making methods as linguistic and fuzzy models. Firstly, the study presents the background of the EU emissions trading system and an overview of different methods used in current research connected with CO2 emission allowances. The key task of the study is an application of one selected model of the fuzzy models group to emission allowances price development predictions. In this consequence, the study presents comparison of prediction results obtained from LFLF and ARIMA models. The prediction errors, advantages and disadvantages of LFLF are discussed; furthermore, the practical usage of emission allowances price predictions in decision making process is suggested. LFLF model can be valuable tool for predictions of the EUA price development since the errors are similar as regarding ARIMA model; however, LFLF is able to predict more precisely the shape of the price development curve.
Jarmila Zimmermannova and Frantisek Hunka, 2015. Emission Allowances Prices Predictions for the Purposes of Managerial Decision Making. International Business Management, 9: 1508-1516.