How Did The Establishment Of The Chinese Pilot Carbon Markets Affected Certain Corporations

In order to fulfill its commitment of energy saving and emission reduction and at the same time make itself prepared for establishing the national carbon emission trading market,China established seven pilot carbon markets around the year 2013.Although the national carbon market has been functioning since late 2017,it is still far from being mature.Thus the historical mission of the pilot markets has not ended yet,and the study of these markets can still provide much guidance to the growing national carbon market.This essay views the establishment of the seven pilot markets as a natural experiment,thus the impact of the establishment to relevant firms can be measured by a difference-indifference approach.This essay determined a group of assured regulated firms through name matching,and defined all corresponding industries as regulated-type industries,thus defining all the firms in such industries as regulated-type firms.After this definition,this essay used the assured regulated firms as the initial treat group,and applied the PSM approach to select firms with similar firm properties from the regulated-type firms as the total sample.Then,this essay classified all regulated-type industries as high emission industries and low emission industries,,and defined the tobin q value as the explained variable.With the adoption of the fixed-effect model and the difference-in-difference approach to measure the treating effect of this impact.Furthermore,this essay also classified all regulated-type firms as high emission industry and low emission industry,and examined the effect of the impact on regulated-type firms.Besides,by separating the initial distribution approaches of permits,this essay also examined the effects of the impact on firms under grandfathering.This essay's conclusion came out with two dimensions,in terms of all the regulated-type firms in these pilot market provinces and cities,the establishment of seven pilot carbon markets have significantly positive effects on their relative firm values while the effects appeared to be significantly negative when considering the case of high emission firms among the regulated-type firms in the seven provinces and cities.Besides,under the circumstances of the trial,grandfathering also had a significantly negative impact on the relative value of firms.