Research On The Price Mechanism Of Regional Carbon Emissions Trading In China

Under the guidance of industrial civilization,the traditional extensive development mode characterized by the increase of factor input leads to serious ecological problems such as excessive consumption of resources and excessive emission of greenhouse gases.In order to cope with global climate change,all countries in the world are actively promoting the establishment of carbon emission trading market.As a participant and contributor to the global emission reduction plan,China has established seven pilot carbon emission trading markets since 2013,and announced the official launch of a national carbon market in December 2017.The core issue in the carbon emission trading system is the formation of the price mechanism.However,at present,there are huge differences in the trading prices of pilot markets in various regions of China,and the price gap will become an obstacle in the process of the national carbon market integration.Under this background,this paper studies the influencing factors of carbon emission trading price,analyzes the causes of regional carbon price differences,and discusses how to form an effective carbon emission right trading market price mechanism in China,which has important practical significance.Based on the price data of three most representative pilot markets,including Beijing,Shanghai and Shenzhen,from January 2014 to May 2018,this paper uses the SVAR model to explore the price mechanism of regional carbon emission in China.In view of that energy price and economic development are the main influencing factors of carbon trading price,this paper uses impulse response function and variance decomposition technology to show the dynamic influence process and difference degree of these factors on China’s regional carbon trading price,and draws the following four conclusions:First,China’s regional carbon emission trading price has obvious historical memory,and the contribution of economic growth and energy price change to the regional carbon price change is slightly lower.Second,regional carbon prices have a positive response to the crude oil prices shocks,and are not highly sensitive to the impact of natural gas price shocks.The response of regional carbon prices to the coal price chocks is quite different.Third.China’s economic development,especially the growth of industrial economy,will promote the increase of regional carbon price.Four,the regional resources endowment,energy structure,the differences between the approved quota system,etc,are the key reasons for the differences in regional carbon price,the regional government fragmented management way,the instability of public policy,and institutional defects such as imperfect supervision system integrated led to China’s regional carbon trading mechanism is not mature.Finally,based on the above conclusions,this paper argues that the current China’s carbon trading market price mechanism can’t be fully regulated by the market,and appropriate government intervention is necessary.Therefore,further policy recommendations are put forward from four aspects:price stability,quota allocation,market liquidity and regulatory mechanism to promote the establishment and improvement of China’s carbon emission rights pricing mechanism.