Research On The Dynamic Risk Spillover Between Carbon Trading Market And Energy Markets

In September 2020,President Xi Jinping proposed China's goal of achieving carbon peaks by 2030 and carbon neutrality by 2060 at the 75th United Nations General Assembly.President Xi also pointed out at the 2020 Central Economic Work Conference that our country as the world's largest developing country and carbon dioxide emitter,needs to carry out new development concept and accelerate the optimization of energy structure adjustment,vigorously develop new energy,accelerate the construction of the national energy right and ETS,improve the dual control system of energy consumption.At present,China is embarking on a new journey of building a socialist modern country and the achievement of carbon peak and carbon neutrality is crucial for the construction of ecological civilization and promoting high-quality development.China,the largest developing country and CO2 emitter,needs to implement the new development philosophy and accelerate the optimization and adjustment of its energy structure.Therefore,this paper introduces the status quo of carbon trading market and energy market firstly,and discovers the dynamic risk spillover between carbon trading market and energy markets.The paper also compares the results of empirical research in China ETS and EU ETS,and proposes specific countermeasures and suggestions which are conducive to the perfection of a unified national ETS and the prevention of carbon risks,so that we can provide theoretical support for improving the internal operating mechanism.Then,the results can also help to establish a risk early warning system of the unified ETS.Firstly,the paper points out the development status of domestic and foreign ETS and energy markets,theoretically analyzes the mechanism of dynamic interdependence and risk spillover between carbon and energy markets,and clarifies that the nature of interdependence is the spillover effect between markets,which lays a theoretical foundation for the paper.Secondly,this paper systematically studies the dynamic risk spillover of domestic and international carbon markets and energy markets.The GARCH-time-varying Copula-CoVar model is adopted to measure the risk spillover of domestic and foreign carbon-energy markets respectively.Then,the domestic and foreign results are compared and analyzed.The results show that the dynamic interdependence between China's carbon trading market and the energy markets is not particularly strong except coal market.The carbon trading market and coal market have strong risk spillover,while the EU carbon market,coal,oil and gas markets all have significant risk spillover.This is related to the incomplete development of China's carbon market,the lack of a unified trading platform and the serious shortage of market functions.Finally,based on the analysis results of the dynamic risk spillover effects of the carbon trading market and the energy market,this paper puts forward specific countermeasures and suggestions that are conducive to the perfection of a unified national carbon ETS and the prevention and control of carbon market risks,including develop a unified carbon market trading mechanism,optimize the energy structure,build a scientific and effective carbon risk early warning system,etc.,providing reference for policy decision makers and enterprises,individual investors.