A Research On The Liquidity Of The International Carbon Emissions Market

The severe weather situation of the world makes the climate resources become more and more valuable. With the "Kyoto Protocol" became effective, the carbon emission permits trade market was born and grew rapidly. As the second largest carbon emitter and the largest supplier of carbon emission permits of the world, China must establish it’s own carbon trading market. Being the soul of financial market, liquidity is vital to it’s development, and to study the liquidity characteristics of the international carbon emission permits trade market can give us some important suggestions of establishing and improving of our own.The thesis first systemizes the related research home and abroad and introduces this market’s origin, developing process and status. Then it defines the liquidity of this market, analyzes it’s macro and micro liquidity and further explores the macro-environmental factors and micro-market factors led to the lack of liquidity theoretically. In addition, the thesis testes the liquidity by data and finds: (1) the market is lack of liquidity, transactions are not active enough and most trades are long-term speculations; (2) the maturity effect in it’s future contracts are obvious, but the weekday effect is weak and some contracts show strong monthly effect; (3) there is a long-term relationship between volume, open interest, turnover, price and its liquidity ratio, especially the turnover and price.Finally, according to the result of the theoretical and empirical analysis, the thesis recommends that we should perfect the carbon emission permits trading law system, regulations and policies, establish a unified trading market, design nice trading contracts, increase the number of dealers and improve the market transparency, in order to improve the liquidity when establishing our own carbon emission permits trade market.