Mechanism of Carbon Finance’s Influence on Radical Low-Carbon Innovation with Evidence from China

Limei Sun, Jinyu Wang, Zhicheng Wang and Leorey Marquez
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Limei Sun: School of Economics and Management, Harbin Engineering University, Harbin 150001, China
Jinyu Wang: School of Economics and Management, Harbin Engineering University, Harbin 150001, China
Zhicheng Wang: Education Foundation, Renmin University of China, Beijing 100086, China
Leorey Marquez: Data61, CSIRO, Clayton, Victoria 3168, Australia

Sustainability, 2020, vol. 12, issue 18, 1-14

Abstract: Radical low-carbon innovations have considerable technological and revolutionary influences. These key technologies considerably reduce carbon dioxide emissions. This study examines the role of carbon finance development in China’s radical low-carbon innovations. The paper identifies the key entities involved, constructs a network model of the interaction between carbon finance and radical low-carbon innovation, and uses multi-agent simulation modeling to analyze the associated influence mechanism. The results demonstrate that the carbon market can promote radical low-carbon innovation by (1) regulating the number of enterprises participating subject to carbon emission regulations, (2) regulating the number of market intermediaries, (3) establishing the market regulation level, and (4) setting the carbon intensity reduction level. The paper concludes that the Chinese government can formulate novel carbon market-related policies and regulations that, in a timely manner, influence the relationship between the carbon market and participating entities to promote the development of radical low-carbon technologies.

Keywords: carbon finance; radical low-carbon innovation; complex network (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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