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Abstract An efficient carbon market is important for mitigating carbon emissions. We investigate the efficiency of Chinese carbon market using Multifractal Detrended Fluctuation Analysis. Data samples are based on the return series of seven pilots in the Chinese carbon market. We find asymmetric distributions of carbon prices and general Hurst exponent in the return series, both of which suggest a lack of efficiency in the carbon markets under study. We then define an inefficiency indicator based on the generalized Hurst exponents, in which a zero value means efficient and a higher value less efficient. The inefficiency values of the carbon markets pilots are all greater than one, indicating ubiquitous inefficiencies among them. But there is evidence that the efficiencies had been slightly improved as the markets developed except for the Tianjin pilot. The efficiency ranking of the pilot markets varies when using different time windows for the analysis. For time scales shorter than a month, the Chongqing pilot generally ranks the highest and the Hubei pilot the lowest; for time scales longer than a month, the Beijing pilot performs the best while Tianjin the worst. Regression results further show that the inefficiency is positively correlated with market activity in the short run while negatively in the long run. Policy suggestions for improving the trading activities are also discussed based on the findings. [ABSTRACT FROM AUTHOR]

Highlights • Price dynamics of carbon pilots are studied as a whole by visibility graph networks. • The networks are similar in topology properties but differ in degree of measures. • Jaccard similarity coefficient shows a low similar in price dynamics of pilots. • A price-dependence mode for the linkage of pilots is proposed. • Visibility graph method is more reliable for measuring weak coupling of time series. Abstract Similarity and heterogeneity analysis of price dynamics across the region provide experiences for China's national carbon emission trading scheme. This study examines the dynamic behavior of carbon prices from the visibility graph network point of view, notably introducing the Jaccard coefficient to measure the similarity. By mapping daily carbon trading prices onto visibility graph networks, we analyze the characteristics of the carbon prices by topological measures of the networks. For the next step, we evaluate the similarity between pilots by the Jaccard similarity coefficient of the constructed visibility graph networks. Consequently, we cluster the pilots based on topology measures of the networks. Results show that the seven carbon markets in China have different patterns of similarity in visibility network properties: They are all small-world networks and are scale-free except for Chongqing pilot. Only Hubei and Shenzhen pilots are assortative, indicating a weak degree of market efficiency. At the same time, the two pilots have the highest value of Jaccard similarity coefficients and Shenzhen pilot presents the highest similarity to the supposed integrated market. According to the structure measures of the networks, the pilots are clustered into four groups which can be seen as sub-markets. Findings in this study indicate that inequalities across those groups should be sufficiently considered in the future national carbon market with particular emphasis on the Hubei pilot. Some sub-markets are suggested to be built according to the similarity in price dynamics. [ABSTRACT FROM AUTHOR]