The Influencing Factors of the Carbon Trading Price: A Case of China against a “Double Carbon” Background

Shaolong Zeng, Qinyi Fu, Danni Yang (), Yihua Tian and Yang Yu ()
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Shaolong Zeng: School of Economics, Hangzhou Normal University, Hangzhou 311121, China
Qinyi Fu: School of Economics, Hangzhou Normal University, Hangzhou 311121, China
Danni Yang: School of Economics, Hangzhou Normal University, Hangzhou 311121, China
Yihua Tian: Hangzhou Economist Association, Hangzhou 311121, China
Yang Yu: Business School, Ningbo University, Ningbo 315211, China

Sustainability, 2023, vol. 15, issue 3, 1-24

Abstract: The Carbon trading price (CTP) can best reflect the fluctuations of the carbon trading market. This paper comprehensively analyzes the CTP mechanism of China’s carbon trading market, discusses the main factors affecting China’s CTP, which include macroeconomic factors, energy price factors, policy factors, and environmental factors, and provides three hypotheses. In order to highlight and test the three hypotheses about the CTP, five representative carbon trading pilot markets were included: Beijing, Shenzhen, Shanghai, Hubei, and Guangdong, and the daily average price data (over years) were adapted from January 2017 to December 2021, using a dynamic heterogeneous panel PMG model. The current paper selects the China air quality index (AQI), Bohai-Rim steam-coal price index (BSPI), Liquefied natural gas index (LNGI), and the Shanghai stock exchange industrial index (SSEII) as the explanatory variables. The empirical results show that there is a long-term equilibrium relationship between the CTP, AQI, energy price, and macroeconomics. Strengthening environmental governance, optimizing the energy structure, and expanding the carbon trading market coverage should be adopted to improve the China carbon emission trade exchange (CCETE) and stabilize the CTP.

Keywords: carbon trading price; emissions trading system; influencing factors; dynamic heterogeneous panel PMG model (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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