Evaluation of an artificial market approach for GHG emissions trading analysis

In this study, an artificial market of greenhouse gases emissions trading is constructed applying a multi-agent model, and the validity of the approach is evaluated by comparing with a conventional method (a regression model) using real emissions trading market data. Mean errors, absolute mean errors, and root mean square errors are used for the examination. As a result of the comparison, it is shown that the proposed model has more power of explanation and is more effective in predicting the emissions trading price than the conventional approach.