Influencing Factors and Formation Mechanism of Carbon Emission Rights Prices in Shanghai, China

Guoli Qu, Chengwei Guo and Jindong Cui ()
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Guoli Qu: School of Economics and Management, Northeast Electric Power University, Jilin 132012, China
Chengwei Guo: School of Economics and Management, Northeast Electric Power University, Jilin 132012, China
Jindong Cui: School of Economics and Management, Northeast Electric Power University, Jilin 132012, China

Sustainability, 2024, vol. 16, issue 20, 1-15

Abstract: With the intensification of global climate change issues and increasingly stringent carbon emission controls, carbon emissions trading has become a crucial market-based mechanism for reducing carbon emissions. A deeper understanding of the factors influencing carbon emission rights prices and their formation mechanisms can enhance market transparency and effectiveness and promote the healthy development of the carbon trading market. This paper identifies the main factors affecting carbon emission rights prices and explores their formation mechanisms from both the internal and external perspectives of enterprises. Using a vector autoregression (VAR) model, it quantifies the impacts of energy prices, the climate, and technology levels on carbon trading prices in Shanghai, China. The results show that, in the short term, enterprise technology levels and energy prices significantly impact carbon emission rights prices, while the climate becomes more critical in the medium to long term. These findings propose specific policy recommendations for improving the carbon emissions trading market, with a focus on these three factors.

Keywords: carbon emission rights prices; influencing factors; formation mechanism; VAR model (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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