Research on the Implementation Effects, Multi-Objective Scheme Selection, and Element Regulation of China’s Carbon Market

Yue Ma, Ling Miao () and Lianyong Feng
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Yue Ma: School of Economics and Management, China University of Petroleum (Beijing), Beijing 102249, China
Ling Miao: School of Economics and Management, China University of Petroleum (Beijing), Beijing 102249, China
Lianyong Feng: School of Economics and Management, China University of Petroleum (Beijing), Beijing 102249, China

Sustainability, 2025, vol. 17, issue 15, 1-19

Abstract: With the proposal of China’s “dual carbon” goal, the carbon market has become a vital tool for controlling carbon emissions. This study constructs a system dynamics model encompassing carbon trading, the economy, energy, population, and the environment, and conducts simulation analysis against the backdrop of China’s national carbon market’s implementation. The results indicate that the implementation of China’s national carbon market significantly promotes carbon emissions reduction, albeit at the cost of some economic development in the short term. However, the suppressive effect of the carbon market on carbon emissions is stronger than its negative impact on economic growth. The effects of carbon reduction strengthen with increases in carbon price, quota auction, CCER price, penalty severity, and the quota reduction rate and weaken with a higher CCER offset ratio. A moderate reduction in the tightening quota reduction rate is more conducive to achieving coordinated development across the multiple objectives of carbon reduction, economic development, and energy structure. Under the constraints of multiple objectives involving carbon reduction, economic development, and energy structure, the reasonable range for carbon prices is between CNY 77.9 and CNY 118.9 per ton, with the maximum quota auction of 23.4%. Additionally, the reasonable range for the quota reduction rates is between 0.84% and 2.18%, with the penalty severity set at 7.

Keywords: carbon market; system dynamics; implementation impacts; scheme optimization; element regulation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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