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Treating carbon emission rights as tradable commodities is a major institutional innovation in the carbon market's response to climate change. The level of carbon emissions from production activities is inextricably linked to climate policy adjustments. Thus, this article applies wavelet-based quantile-on-quantile regression to study the impact of climate policy uncertainty (CPU) on the carbon trading price (CTP) in the European Union Emissions Trading System (EU ETS). Short-term results show a mixed effect of CPU on CTP. In the medium to long term, there is a positive correlation between the two at the high quantiles of CPU. The results are supported by the theoretical mechanisms of CPU on CTP. The CTP represents the economic cost of carbon emissions, which can significantly influence the level of carbon emissions and is critical to achieving carbon neutrality. Governments should strive to reduce CPU and manage market expectations to minimise the impact of CPU on CTP. In addition, this paper can also inspire carbon market participants to help them make sound and scientific investment decisions. • Apply wavelet-based quantile-on-quantile regression to study the effect of CPU on the CTP. • The CPU is at different quantiles and time frequencies, the link between CPU and CTP is dynamic • The results are supported by the theoretical mechanisms of CPU on CTP. • The CTP can significantly influence the level of carbon emissions and is critical to achieving carbon neutrality. • Governments should strive to reduce CPU and manage market expectations to minimise the impact of CPU on CTP. [ABSTRACT FROM AUTHOR]

Foreign aid is an essential tool in economic diplomacy tool, yet its significance in global environment governance often goes underestimated. Taking 118 countries that received Chinese foreign aid from 2000 to 2018 as the research objects, this study investigated the impact of foreign aid on the carbon emissions of recipient countries and the mechanism. Firstly, the present study found that Chinese foreign aid increased the overall carbon emission levels of recipient countries during the sample period, with each 1 % increase in Chinese foreign aid being followed by a 0.0148 % increase in the carbon emissions of recipient countries. Secondly, the improvement of the economic growth and technological innovation of recipient countries served a mediating role in the process of Chinese aid affecting the carbon emissions of recipient countries. Thirdly, the threshold test results indicate that Chinese foreign aid helps to reduce the carbon emission levels of recipient countries when their economic growth rates and technology innovation levels are low, noting that this emission reduction effect may weaken as the recipient countries' economic growth rates and technological innovation increase. The findings of this paper expand the literature on the functional theory and non-economic consequences of foreign aid. Moreover, they told significant theoretical and policy implications for promoting cleaner aid practices and fostering low-carbon, green growth in recipient countries. • Chinese foreign aid (CFA) increased the overall CO 2 emission of recipient countries. • The improvement of the economic growth and technological innovation of recipient countries served a mediating role. • CFA helps to reduce the CO 2 emission of recipient countries with low economic growth rates and limited technical innovation. [ABSTRACT FROM AUTHOR]