EconPapers    
Economics at your fingertips  
 

Are there spillovers among China's pilots for carbon emission allowances trading?

Li-Yang Guo and Chao Feng

Energy Economics, 2021, vol. 103, issue C

Abstract: As the process of carbon reduction continues, carbon trading market in China is becoming mature and moving from fragmented pilots to a national unity. This study aims to examine whether there are return and volatility spillovers among China's carbon emissions trading pilots, by using a generalized forecast error variance decomposition as well as a spectral decomposition in VAR process. Empirical results show that there are return and volatility spillovers among China's carbon emissions trading pilots. But all of them are relatively low, with each pilot contributing or receiving no more than 1.5% of impacts in return spillover, and no more than 7% in volatility spillover, which means that the dynamics of price in each pilot are mainly driven by its own factors. However, some characteristics of spillover effect are still worth exploring. The spillover effect presents an approximate “M” shaped fluctuation trend during the period from pre- to post-compliance. In terms of frequency decompositions, return spillover is dominated by short-term effects, while volatility spillover is dominated by long-term effects. Some policy implications are also provided along with these research conclusions.

Keywords: Emission allowances market; Spillover effect; Frequency decomposition (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S014098832100445X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:103:y:2021:i:c:s014098832100445x

DOI: 10.1016/j.eneco.2021.105574

Access Statistics for this article

Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

More articles in Energy Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2024-02-12
Handle: RePEc:eee:eneeco:v:103:y:2021:i:c:s014098832100445x