Establishing National Carbon Emission Prices for China

Chia-Lin Chang (changchialin@email.nchu.edu.tw), Michael McAleer and Te-Ke Mai
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Te-Ke Mai: Department of Economics National Tsing Hua University, Taiwan.

No 2018-10, Documentos de Trabajo del ICAE from Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico

Abstract: The purpose of the paper is to establish national carbon emissions prices for the People’s Republic of China, which is one of the world’s largest producers of carbon emissions. Several measures have been undertaken to address climate change in China, including the establishment of a carbon trading system. Since 2013, eight regional carbon emissions markets have been established, namely Beijing, Shanghai, Guangdong, Shenzhen, Tianjin, Chongqing, Hubei and Fujian. The Central Government announced a national carbon emissions market, with power generation as the first industry to be considered. However, as carbon emissions prices in the eight regional markets are very different, for a variety of administrative reasons, it is essential to create a procedure for establishing a national carbon emissions price. The regional markets are pioneers, and their experience will play important roles in establishing a national carbon emissions market, with national prices based on regional prices, turnovers and volumes. The paper considers two sources of regional data for China’s carbon allowances, which are based on primary and secondary data sources, and compares their relative strengths and weaknesses. The paper establishes national carbon emissions prices based on the primary and secondary regional prices, for the first time, and compares both national prices and regional prices against each other. The carbon emission prices in Hubei, Guangdong, Shenzhen and Tianjin are highly correlated with the national prices based on the primary and secondary sources. Establishing national carbon emissions prices should be very helpful for the national carbon emissions market that is under construction in China, as well as for other regions and countries worldwide.

Keywords: Pricing Chinese carbon emissions; National pricing policy; Energy; Volatility; Energy finance; Provincial decisions. (search for similar items in EconPapers)
JEL-codes: C22 C58 G12 Q35 Q48 (search for similar items in EconPapers)
Pages: 59 pages
Date: 2018-03
New Economics Papers: this item is included in nep-cna, nep-ene, nep-env and nep-tra
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https://eprints.ucm.es/id/eprint/47098/1/1810.pdf (application/pdf)

Related works:
Journal Article: Establishing national carbon emission prices for China (2019)
Working Paper: Establishing National Carbon Emission Prices for China (2018)
Working Paper: Establishing National Carbon Emission Prices for China (2018)
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