Search

The launch of the national carbon emissions trading (CET) market has resulted in a closer relationship between China's CET market and its electricity market, making it easy for risks to transfer between markets. This paper utilizes data from China's CET market and electric power companies between 2017 and 2023 to construct the spillover index model of Diebold and Yilmaz, the frequency-domain spillover approach developed by Barun'ik and Křehl'ik, and a minimum spanning tree model. The comparison is made before and after the launch of the national CET market. Subsequently, this paper examines the market spillover effects, as well as the static and dynamic properties of network structures, considering both the time domain and frequency-domain perspectives. The research findings suggest the following: (1) There is a strong risk spillover effect between China's CET market and the stock prices of electric power companies; (2) There is asymmetry in the paired spillover effects between carbon trading pilot markets and the national CET market, and differences exist in the impact of risk spillovers from power companies between the two; (3) The results of the MST model indicate that the risk contagion efficiency is higher in the regional CET pilot stage compared to the national CET market launch stage, with significant changes occurring in key nodes before and after the launch of the national CET market; (4) Both the dynamic spillover index and the standardized tree length results demonstrate that crisis events can worsen the risk contagion between markets. Besides offering a theoretical foundation and empirical evidence for the development of China's CET and electricity markets, the findings of this paper can provide recommendations for financial market participants as well. [ABSTRACT FROM AUTHOR]

To combat climate change, the Chinese government has implemented a package of policies to support the development of the biogas power generation industry. However, the promotion of biogas power generation technology in China is relatively slow. Therefore, it is of practical significance to study the promotion of biogas power generation technology against the background of policy support. In order to study the effect of policy on the promotion of biogas power generation technology, a system dynamics model is constructed in this paper. The results show that under the feed-in tariff subsidy policy, biogas power generation technology can be well promoted because it has good economic and environmental effects. In addition, if the biogas power generation technology is considered to participate in carbon emission trading, the carbon price also has a positive impact on the promotion of biogas power generation technology because it increases the perceived economic value of biogas power generation projects. Finally, this study can also provide reference value for the promotion of biogas power generation technology in other areas. [ABSTRACT FROM AUTHOR]

China has adopted a gradualism principle in establishing its carbon emission trading system from the regional pilot markets to a national one. In view of the huge market potential and large differences across China, this paper applies the cointegration test and VECM (Vector Error Correction Model) to investigate the long-run trends and the price dynamics of regional pilot markets. The results show that the prices of the regional pilot markets form three long-run trends exhibit mean-reversion patterns. The launch of the national market marks the different performance of regional pilot markets. After the launch of the national market, the number of long-run trends reduces from three to one and the severity of the mean-reversion patterns is eased, indicating the efficiency improvement in China's carbon market from a fragmented toward a unified market. The policy implication is that China should further develop its national market by incorporating the regional markets into the national one and encouraging more market participants for market transaction. [ABSTRACT FROM AUTHOR]

The European carbon emission trading market is the largest and most mature market, while China's carbon market has a short history. Institutionally, cross-market transaction is infeasible between the two markets. This paper investigates the long-run trend between the two markets as well as the price dynamics. Results show that a long-run trend exists between the Chinese and European carbon markets. Both markets possess self-correction capability in reducing price deviations, signaling a certain level of market efficiency. However, both markets also exhibit pricing inefficiency as historical price movements are able to impact prices. The European market informationally leads the Chinese market. Policy implications are that China should further upgrade its information disclosure system, such as unifying information disclosure standards across industries, and further develop its carbon derivatives markets to improve market transparency and market competition. [ABSTRACT FROM AUTHOR]

As China reaffirms its commitments to limit the climate change risk and improve air quality, a combination of new policy and technology opportunities is presenting itself. A national emission trading scheme (ETS) begun in 2017 and is showing great promise, creating decentralized incentives for cost effective pollution mitigation. At the same time, sustained energy sector innovation is driving the costs of renewable electric power generation below those of fossil fuel substitutes. Early economic evidence of ETS measured pollution reductions, but has not addressed important economy-wide net benefits. This paper focuses on technology and energy cost savings and is the first to account for three multiplier effects—shifting consumption patterns, job growth, and the benefits of induced productivity growth—that would result from accelerated renewable electricity deployment in China. Results from a dynamic recursive computable general equilibrium model for 2017 to 2030 show that expanding renewable deployment can interact with the ETS to slash GHG emissions, as well as energy costs, stimulating significant long-term economic growth. These results suggest that China should accelerate its clean energy transition, not only for the air-quality and climate benefits, but to fulfill the energy sector's potential to promote innovation, employment, and economic growth. [ABSTRACT FROM AUTHOR]

China's green credit has mostly been invested in new energy areas with positive environmental externalities in recent years, while coal power enterprises have been neglected. This paper constructs a tripartite evolutionary game model among government, coal power enterprises, and banks to clarify the key factors and mechanisms for coal power enterprises undergoing green transformation. The research results show that: Firstly, to realize the spontaneous green transformation of coal power enterprises, spontaneous profitability must be achieved before the removal of policy incentives, which is reflected in the continuous increase in electricity price, carbon emission trading price, and decrease in green transformation cost. Secondly, the green credit adjustment factor cannot determine whether a company chooses to undertake green transition, but it provides a valuable window of green transition for companies. When the relative benefits of green transformation projects are greater than the relative costs, coal power enterprises will undergo green transformation spontaneously. Thirdly, lower green credit interest rates are not better. An optimal green credit interest rate exists, that allows coal power enterprises to obtain the longest transition window in which to achieve spontaneous profitability for green transition projects. [ABSTRACT FROM AUTHOR]

To cope with huge carbon emission pressure, China has implemented a carbon emissions trading pilot policy that aims to provide reasonable suggestions for the smooth operation of the national carbon market. This paper selects the provincial panel data in China from 2005 to 2019 and uses the propensity score matching-difference in difference (PSM-DID) method to evaluate the carbon emission policy's reduction effect. Based on carbon emissions (CE) and carbon emission intensity (CI), provinces and cities are divided into four regions, and each region is verified by spatial difference analysis. Furthermore, the mediating effects of carbon emission reduction through the dual aspects of technological progress and industry structure are also discussed. Results verified that, (1) under the carbon emission trading policy, regional carbon emissions and carbon emission intensity are both significantly reduced. (2) Technological progress helps to reduce carbon emissions, while industrial structure shows no obvious contribution. (3) The four regions all show ideal emission reduction effects, of which the High CE-High CI region shows the best, but is greatly restricted by techniques. The industrial structure of the High CE-Low CI region needs to be further optimized for carbon reduction. In the Low CE-High CI region, the carbon emissions brought by economic development fail to effectively improve per capita GDP. The Low CE-Low CI region contributes greatly to carbon emission reduction with technical advantages. [ABSTRACT FROM AUTHOR]

While international trade drives countries' economic growth and promotes employment, it also has some environmental impact. To investigate the impact of trade on carbon emissions and employment, this study performs a detailed decomposition and measurement of embodied carbon emissions and employment in value-added trade between China, Japan, and Korea from 2007–2019. The current study established that, while China's trade with Japan and Korea created many domestic jobs, it also resulted in significant domestic carbon emissions. While Japan and Korea's trade with China reduced carbon emissions, employment in their own countries was reduced and replaced by employment in China. At the value chain route level, trade among the three countries through each value chain route either achieves employment promotion at the cost of increased carbon emissions or promotes domestic emissions reduction at the cost of employment loss. However, it is worth noting that, when trade between Japan and Korea was conducted through simple GVCs (route 2), it not only helped reduce Japan's carbon emissions, but also effectively promoted employment. This is the ideal trade route. The results of this study can provide useful reference information for developing countries such as China, to achieve sustainable economic growth, carbon emission reduction, and employment promotion in the context of trade globalization. [ABSTRACT FROM AUTHOR]

As an important tool to control CO2 emission, carbon emission trading (CET) has been highlighted in prior studies for its positive effects on firms. However, we are concerned about the role of the CET in corporate financing. Through a quasi-natural experiment from China's CET pilot, regarded as the start-up stage of China's emission trading system, we investigate the manufacturing corporate financing (i.e., debt and commercial credit financing). The results show that the firms in China's CET market have less debt financing. Additionally, in the heterogeneity analysis, we found that (1) the CET is negatively related to corporate financing when their financing constraints are weak, whereas it only reduces long-term debt for the firms with strong financing constraints. (2) The impact of the CET on corporate financing is not significant for the firms located in first-tier cities in China, but in other cities, the CET negatively influences firms' long-term debt and contributes to commercial credit financing. (3) The CET only plays a negative role in long-term debt and a positive role in commercial credit financing for firms in high energy-consuming industries. This study enlightens the government to improve the emission trading system and increase financing support to manufacturing firms in the CET market. [ABSTRACT FROM AUTHOR]

In 2020, China proposed the goal of achieving carbon emission peaks by 2030 and carbon neutrality by 2060. For China, whose energy consumption structure has long been dominated by fossil energy, carbon trading and new energy are crucial for the realization of the emission target. By establishing a connectedness network model, this paper studies the static and dynamic spillovers between the Hubei carbon trading market, new energy stock market, crude oil market, coal market, and natural gas market in China, and draws the following conclusions: (1) the static spillover index of the carbon–energy–stock system is 3.57% and the dynamic spillover index fluctuates between 7.67% and 22.62%, indicating that the spillover effect of the system is low; (2) for the whole system, whether from a static or dynamic perspective, the carbon market always plays the role of net information receiver, while new energy is the net information transmitter; (3) the new energy stock market and the coal market always act as net information transmitters to the carbon market; and (4) the spillover effect of the system is asymmetric, wherein the system is more sensitive to negative information about price returns, and this asymmetry is much greater when the system is active. [ABSTRACT FROM AUTHOR]