Research On The Effectiveness Of China’s Carbon Trading Market

Global environmental problems are becoming more and more prominent,increasingly affecting people’s daily life,In order to curb the deterioration of the environment,China has taken measures to put forward such slogans as "green water and green mountains are golden mountains and silver mountains" and "resolutely win the battle to defend the blue sky";In action,we should continuously promote the development of carbon trading market,control and reduce the emission of carbon dioxide and other pollutants with the help of financial market platform,and realize the sustainable development of economy.Since 2013,China has launched eight pilot carbon markets in Shenzhen,Shanghai,Beijing,Guangdong,Tianjin,Hubei,Chongqing and Fujian,In December 2017,the national development and Reform Commission announced the establishment of a national unified carbon market.After several years of construction period,the national unified carbon market will officially start trading in early 2021.Based on this background,this paper explores the operation efficiency of China’s carbon market to provide reference for the construction of the national carbon market.Using the efficient market hypothesis theory and fractal market hypothesis theory,this paper compares and analyzes the effectiveness of China’s eight pilot carbon markets,and puts forward policy suggestions for the better development of the national unified carbon market.The first part is the introduction of the article,which combs the writing background and significance of the article,discusses the relevant literature at home and abroad at different levels,and analyzes the previous research on carbon market.Secondly,it summarizes the theories related to carbon trading market,including the meaning of terms involved in carbon trading market,the theoretical basis for the formation of carbon market,and analyzes the differences between efficient market hypothesis and fractal market hypothesis.Then it focuses on the analysis of the operation status of the eight pilot markets.From the comparison of trading volume,performance and market scale,the four pilot carbon markets in Guangdong,Shenzhen,Hubei and Fujian are in good operation.Finally,taking the closing prices of eight pilot carbon markets in China as the research objects,the unit root test under the efficient market hypothesis theory and the nonlinear estimation method of modified rescaled range method under the fractal market hypothesis theory(NL-MR/S)are used to test the effectiveness of the eight carbon markets with Eviews and SAS software.Based on the theory of efficient market hypothesis,the unit root test results show that the three carbon markets of Shanghai,Shenzhen and Guangdong are weakly efficient.However,the return series of China’s carbon trading market does not follow the normal distribution.The conclusion has reference significance.Therefore,use the empirical method under the fractal market hypothesis to judge the effectiveness of the eight pilot carbon markets,fractal market hypothesis theory is more suitable to test the effectiveness of China’s carbon market from the perspective of nonlinearity,the results of NL-MR/ S method show that the two carbon markets in Hubei and Guangdong have reached weak efficiency,while the other six pilot carbon markets are not effective,overall,the effectiveness of China’s carbon market is low.Then,combined with the actual development and operation mechanism of each pilot carbon market,the reasons for the effectiveness of each pilot carbon market are analyzed.Finally,according to the development situation and research conclusions of China’s carbon market,this paper puts forward some promotion strategies,in order to contribute to the development of China’s carbon market.It is a long way to go to build an effective carbon market,which needs continuous exploration and improvement.