Price Jumps of China’s Carbon Market: The View from Market Transactions and Policy Releases

Yanyan Xu, Ying Chen and Jing Liu

Emerging Markets Finance and Trade, 2024, vol. 60, issue 14, 3402-3430

Abstract: As the principal emitter of carbon dioxide, China institutes dual carbon goals and fosters carbon pilot markets. This paper explores the mechanism of carbon’s price jump, both considering the deployments of policy instruments and inherent financial characteristics unique to each pilot market within China. The results indicate that market transaction information exerts the most profound influence on instances of price jumps, whereas the implementation of uniform national policies also yields a noteworthy effect. However, the impact of pilot-specific policies varies across different regions and highlights its heterogeneity. Consequently, these findings could provide sound evidence to facilitate the involvement of traders and furnish decision-making departments to produce more accurate and efficient policies.

Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:mes:emfitr:v:60:y:2024:i:14:p:3402-3430

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DOI: 10.1080/1540496X.2024.2347404

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