Effect Of Carbon Emissions Permit Trading On Enterprise Value

At the 75th session of the United Nations General Assembly,China formally brought forward the carbon peaking and carbon neutrality goals,aiming to peak carbon emissions by 2030 and achieve carbon neutrality by 2060.The Outline of the14 th Five-Year Plan(2021-2025)for National Economic and Social Development and Vision 2035 of the People’s Republic of China clearly proposed to "make sustained efforts to achieve the objectives of China’s Intended Nationally Determined Contributions 2030 and formulate an action plan to reach the peak of carbon emissions by 2030" and "anchor efforts to achieve carbon neutrality by 2060 by adopting even more robust policies and measures".To realize those strategic goals above,many documents were introduced by our country,proposing innovation-driven,green development,and openness and cooperation.However,mandated emissions reductions may become impediments to economic development.Therefore,enterprises are supposed to take initiative to the transformation of green economy under the direction with more flexible environmental regulations.In the carbon emission trading system,stakeholders are forced to deal cost effectively under the market mechanism,which requires energy conservation,pollution reduction,and green operation.A unified national carbon trading market system has now been formed initially in China.At present,domestic research on carbon emission trading is mainly focuses on the accounting treatment and information disclosure.Only few studies test and analyze the effect of such trading on enterprise value based on realistic data of markets and enterprises,while there is no conclusion that to what degree the enterprise value will be affected in what kind of form.Under this premise,based on the Case of Universal Scientific Industrial(Shanghai)Co.,Ltd.,this paper made a vertical comparison of the environmental and economic data before and after its participation in the trials for trading carbon emissions rights,and made a horizontal comparison between the company’s performance and sector averages.The effect of carbon emissions permit Trading on Enterprise Value on multiple levels was intensively studied from a micro perspective.The study found that participation in carbon emission permit trading has different degrees of impact on enterprise value from three aspects: ESG,financial indicators and market indicators.The innovations of this thesis are as follows.Firstly,it’s a comprehensive and systematic study,while in-depth and detailed.There is not only a statistical analysis based on the macro situation of Chinese carbon emission permit trading market,but also detailed quantitative and qualitative analysis of specific cases.Secondly,environmental data,ESG rating information and economic data shall be comprehensively used to analyze the whole process of enterprise value.Thirdly,an application case of the effect of companies’ participation in carbon emission permit trading on enterprise value is presented,which can provide reference for Chinese enterprises.The deficiencies of this thesis are as follows.Firstly,the carbon emissions factors and green expenditure data involved in this paper mainly come from the social responsibility reports and sustainability reports disclosed by the company itself,which may have certain deviation with no reliable and independent third-party certification for verification.Secondly,there is no open source to obtain carbonpermits trading data,so there may be some deviation in the estimation of the costs of carbon-permits trading.Thirdly,conclusions in this case may not be completely extended to other industry.Finally,there is no statistic and econometric analysis on the extent to which the participation in carbon emission permits trading affects the indicators of enterprise value,which shall be analyzed and discussed in the future.