Research On The Carbon Emissions Trading Market Theory And Practice In China

In recent years,carbon dioxide emissions are growing rapidly and have caused global climate warming,which has brought unprecedented challenges and threats to humankind and has become a global issue of common concern to society.Low-carbon development has been recognized as the mainstream of the world today.More and more countries and regions have adopted the carbon emissions trading market as an effective means to reduce emissions at a low cost.The global carbon market is mature after more than ten years of development,while it started later in China than in developed countries in Europe and America.However,China has been planning for a long time,which experienced from partial pilots to a nationwide uniform carbon market traced back to the first pilot carbon market launched in 2013.The uniform carbon market started running in2021,but there are problems such as weak pricing ability and bad market influence due to late launching,lack of development experience,and other defects.Studying the theoretical basis and development of the carbon market,examining the characteristics of price fluctuations combined with the experience of the most mature carbon market in the world,is conducive to the in-depth understanding of the operation law of China’s carbon market,testing the effect of the market system,to better play the role in emission reduction.The research is centered on what is carbon market,the theoretical foundation and development of carbon market,the construction practice of China’s carbon market,the assessment of carbon price volatility,and how to promote the construction of China’s national carbon market from theory to practice.Firstly,starting from the basic theories of carbon market economics,we clarify the development of related research,and explain the content and practice of climate economics theory,externality theory,Coase’s theory of property rights trading,and the theory of emission rights trading in the context of specific carbon trading problems,showing that carbon emission is a typical negative externality problem,and carbon trading is a policy tool to internalize the externalities of environmental problems based on Coase’s theory of property rights.The basic idea of carbon market is the definition of property rights of carbon emissions,and the core is the issue of carbon price;based on the study of the basic theory of carbon market,the design of carbon market and carbon finance are further introduced,and carbon market is essentially a carbon pricing mechanism,which is based on the goal of total control and achieves the purpose of emission reduction at lower cost through market mechanism.Then,comparing the practice and relevant experience of the EU carbon market,the study focuses on the practice of China’s carbon market.It’s shown that the carbon market in practice presents problems such as insufficient liquidity,inactive trading,relatively single trading products,and low financialization,which indicates that there is still room for further improvement of the market-based trading mechanism while the basic institutional rules of China’s carbon market have achieved a smooth implementation.Thirdly,carbon price fluctuation characteristics of China’s pilot carbon markets are analyzed by adopting the ARMA-GARCH model and fully considering the regional difference,and the price fluctuation of the EU carbon market was compared with that of China after the opening of the national carbon market.The results show that there are regional differences between the eight pilot carbon markets in terms of how they respond to external shocks and the persistence of the impact of early market fluctuation,and China’s national carbon market is less resilient to risk than those mature in the EU and reflects volatile characteristics.The price discovery function of the carbon market requires to be further improved,and the overall liquidity needs to be further enhanced.The empirical results fully prove conclusions of theoretical research.The relevant research on the national carbon market in China is fewer due to it being in the early phase of operation.This paper conducted a systematic study on the carbon markets in China based on the experience of domestic pilot markets and the most mature markets abroad.It explored existing problems and the development path of China’s current carbon markets and extended the application range of the economic theory of carbon trading,to provide valuable experience and reference for the stable development of China’s carbon market.