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This paper examines the risk spillover effect between the carbon market and the stock market in China and the role of corporate social responsibility (CSR) on this effect. Employing Beijing, Hubei, and Guangdong carbon markets, we apply time-domain and frequency-domain spillover approaches and find that during the Chinese stock market crisis in 2015, risk spillovers from the stock market to the carbon market were more pronounced. Additionally, CSR firms are more dominant as information transmitters than those non-CSR (NCSR) firms in the carbon market. However, plausibly, due to the infancy of carbon trading, our results show that the level of connectedness between the carbon market and the stock market in China is relatively low. [ABSTRACT FROM AUTHOR]

China launched seven emissions trading scheme (ETS) pilots in 2011, and a national ETS, at the end of 2017 in an attempt to reduce its greenhouse gas emissions (GHGs) and drive its extensive energy transition in a cost-effective way. The Hubei province pilot ETS has operated since 2014, and an analysis of its effectiveness can provide lessons for the nascent national system. This paper disaggregates Hubei's industrial carbon dioxide (CO 2) emissions from 2005 to 2018 into economic scale, economic structure, energy efficiency, and energy structure effects using the logarithmic mean Divisia index (LMDI). Difference-in-difference (DID) models then assess the implementation effectiveness of this ETS, and its impact on the main influencing factors of the LMDI. Ten cities each in the Hubei and Hunan provinces are selected as treatment and control groups, respectively, in the DID models. Results show that the change in industrial CO 2 emissions is mainly due to the economic scale and energy efficiency effects. After the ETS implementation, the energy structure effect has a limited impact on emissions, while the economic structure effect makes a negligible contribution. Moreover, the implementation of the ETS has had little demonstrable impact on industrial CO 2 emissions, gross domestic product (GDP), energy consumption intensity, and CO 2 emission intensity. This lacking of impact is caused by the GHG monitoring capacity deficits of the local Development and Reform Commission, and irrational quota allocations. Effective supervision and quota allocation should be developed to increase the impacts of the ETS. [ABSTRACT FROM AUTHOR]

China is the world's largest developing country and a carbon dioxide emitter. A functional carbon market can effectively reduce carbon emissions. This paper uses the Markov chain Monte Carlo-stochastic volatility model and the wavelet multi-resolution model to analyze the volatility of price returns and the dynamic characteristics of price fluctuations in the carbon pilot markets in Hubei, Shanghai, and Shenzhen. The price movements in these markets are compared to the emissions trading system of the European Union (EU-ETS). The results show that there is a volatility clustering in the price of carbon trading in Hubei, Shanghai, Shenzhen and the EU-ETS. China's carbon pilot markets have a deficiency in terms of volatility stability, as does the EU-ETS. From a long-term perspective, China's carbon market lacks a detailed development plan, which is vital because the construction of the market system is not yet optimal. From a short-term view, China's carbon market is not active and the participants' attitude toward risk is extremely sensitive. • MCMC-SV and wavelet multi-resolution model applied to carbon price volatility. • Three major Chinese markets are compared to the EU-ETS. • All markets evidence volatility clustering. • China's carbon market lacks a detailed development plan for the long term. • Short-term, China's carbon market must become more active and offer more products. [ABSTRACT FROM AUTHOR]

As an economic means to cope with climate change, carbon trading has become an important measure to reduce carbon emissions in China. It has been over seven years since the initiation of seven pilot carbon markets, but has the implementation achieved the goal of controlling carbon emissions in the region? Are the effects really resulted from the carbon market other than other energy-saving and emission reduction policies? Based on the provincial panel data of China from 2005 to 2016 this paper conducts an empirical study on the emission reduction effects of pilot projects using the Difference-in-differences model (DID). The results show that: (1) The implementation of carbon markets in Beijing, Shanghai and Hubei exhibited a significant inhibitory effect on local carbon emissions, but a promoting effect in Guangdong, and no significant effect was found in Tianjin; (2) In terms of time lag effect, no significant inhibiting effect on the local carbon emissions is found during the first year of opening of Shanghai carbon market but the effect grew significantly from 2015 to 2016; while for Hubei and Beijing, significant effect was shown from the first year of running. Being an experimental program to see whether the carbon trading policy would work in China or not and if it does, under what conditions and settings the policy becomes effective, the 7 pilot markets provide important experiences and lessons to the upcoming nationwide market in China. Based on the empirical result that the carbon trading system in Beijing, Shanghai and Hubei effectively reduced carbon emissions, it is suggested that the national carbon market should actively learn from the experiences of these three pilot markets particularly. [ABSTRACT FROM AUTHOR]