In the EU-ETS allowance market, the price of an allowance can be affected by the state of the economy.

Question

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The price of an allowance in the EU-ETS market can be affected by various factors, including the state of the economy. For example, during a recession, demand for allowances may decrease as businesses reduce their emissions, leading to a decrease in allowance prices. On the other hand, during an economic boom, demand for allowances may increase as businesses expand their operations and emit more, leading to an increase in allowance prices.

In the EU-ETS Allowance Market, the Price of an Allowance