The Market-Oriented Development of China’s Carbon Emissions Trading: Based on the Comparative Analysis of China and EU

Runhong Lin () and Tongjuan Cai
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Runhong Lin: School of International Trade and Economics, University of International Business and Economics, Beijing 100029, China
Tongjuan Cai: Chongyang Institute for Financial Studies, Renmin University of China, Beijing 100872, China

Energies, 2025, vol. 18, issue 5, 1-18

Abstract: We mainly focus on the degree of marketisation of China’s carbon emissions trading from two aspects. Firstly, based on the financial market theory, the different characteristics of the construction of the EU and China’s carbon emissions trading market are compared. Secondly, the VAR-MVGARCH-DCC model is used to empirically analyze the dynamic correlation between the carbon emissions trading market and the stock market. The results show that the marketisation degree of China’s carbon emissions trading still has much room for improvement compared with the EU, and the carbon emission market has a significant guiding effect on the stock market. Therefore, to improve the carbon emissions trading system, we should pay attention to the influence of financial factors on carbon emissions trading and the establishment of transmission channels from the carbon market to the stock market. It is recommended to learn from the experience of the European Union and to take key industries as a guide to create a modern carbon financial system with more Chinese characteristics.

Keywords: dual-carbon target; carbon emissions trading system; carbon market and stock market; VAR-MVGARCH-DCC model; linkage (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2025
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