Carbon Pricing and Stock Performance: Evidence from China’s Emissions Trading Scheme Pilot Regions

Qiongqiong Zhang () and Jianing Zhang
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Qiongqiong Zhang: College of Business and Public Management, Wenzhou-Kean University, Wenzhou 325060, China
Jianing Zhang: College of Business and Public Management, Wenzhou-Kean University, Wenzhou 325060, China

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2023, vol. 26, issue 04, 1-28

Abstract: This paper examines a sample of 167 publicly listed enterprises covered by eight regional pilot emissions trading markets in China from 2013 to 2023. Our empirical findings indicate that the carbon price returns negatively affect the stock returns of enterprises covered by the regional markets, with the Shenzhen and Guangdong regions suffering a more pronounced effect. Furthermore, high-carbon-intensity enterprises are more susceptible to this negative impact than their low-carbon-intensity counterparts. The robustness of the negative relationship is evident even after the national emissions trading market opened on July 16, 2021. This study provides insightful guidance for policymakers to regulate emissions trading markets.

Keywords: Emissions trading scheme; carbon pricing; stock returns; carbon intensity; China (search for similar items in EconPapers)
JEL-codes: C23 G12 G18 Q54 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1142/S0219091523500248

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