The Efficiency And Spillover Effects Of Carbon Finance Trading Market

Since the United Nations Framework Convention on Climate Change took effect in 1994, “the full control of carbon dioxide and other greenhouse gas emissions so as to cope with the adverse effect of global warming on human economy and society” has become a broad consensus throughout the world. Delegates from 195 countries signed the Paris Agreement on climate change conference in Paris on December 12, 2015. Since then, countries around the world have further enhanced the comprehensive cooperation in the field of tackling climate change and improving greenhouse effect. The signing of Paris Agreement is of the special landmark significance and it draws out the path of global response to climate change after 2020, and will have profound impact on the pattern and the development of the world’s major carbon finance trading market.As the largest developing country, China is using their own actions and wisdom to try to explore a feasible green development model and help all countries to tackle climate change and promote the transformation to ecological civilization. During the “twelfth five-year plan” period, China constantly enhanced environmental protection, introduced lots of policies and measures to control pollution, and obtained certain achievements. The current bold attempt and exploration of China in the field of new energy and renewable energy have aroused the attention of the world. Facing opportunities and challenges in the future, China will seize the important opportunity of “thirteenth five-year plan”, stick to “innovation, coordination, green, open and sharing” development idea, be based on the development of science and technology innovation and mechanism innovation, develop by optimizing and upgrading industrial structure, take the green building and low-carbon transport as the breakthrough point, emphatically strengthen the construction of ecological civilization, build the new low-carbon energy system comprehensively, and make efforts in creating the new situation of modernization construction of the harmonious development of man and nature.In the process of reducing carbon dioxide emissions, economic means to solve the problem of environmental climate has become an important means to control and reduce greenhouse gas emissions. At present, carbon finance market has become the main operation platform of the means. From the domestic and international aspects, the paper analyzes the existing efficiency of current carbon finance trading market, studies the spillover effects of carbon finance trading market from the macro, meso, and micro perspectives and then proposes some corresponding policy recommendations according to the research conclusions.As for the formation mechanism of carbon finance trading market, the paper explores the practical application of traditional trading market theory, environmental value theory and environmental Kuznets curve theory. Then, the paper mainly analyzes the structure of the carbon finance market of developed countries, provides detailed introduction of the existing trading mechanism and operation mode of carbon finance trading market of the European Union, the United States and other countries. Based on the analysis of the development model of international carbon finance market, the paper summarizes the he related policies of China’s response to the global greenhouse effect and the development paths of carbon finance trading, combines with the operation situation and development status of existing seven carbon finance market pilot exchanges in China, and finally finds out the possible problems in the process of carbon trading market development in China, taking it as the starting point of research.For the analysis of the carbon finance market efficiency, the paper first summarizes and combs the research literature of relevant international and domestic carbon finance market efficiency through literature research and method of induction. Then, the paper takes the efficient market hypothesis theory proposed by American economist Fama and fractal market hypothesis theory proposed by Edgar E. Peters the as the theoretical basis for the effectiveness study of the carbon finance trading market. Next, the paper selects the daily closing price of EUA futures of European climate exchange(ECX) at three stages(2005-2007、2008-2012、2013-2014)in EU carbon trading market and the spot trading price of six carbon emission exchanges as the samples, carries on the empirical analysis on the carbon finance trading market effectiveness of European Union and China through descriptive statistics analysis, ADF test and variance ratio(VR) test and R/S analysis method, from the perspectives of efficient market theory and fractal market theory. The empirical analysis results based on the efficient market theory shows that the EU carbon finance trading market and six carbon emissions exchanges in China reach the weak effective level. Besides, the empirical analysis results based on the fractal market theory holds that the EU carbon finance trading market doesn’t reach the state of random walk in the first and second stage, and only reaches the weak effective state under the effective market theory in the third stage; Among the carbon finance trading markets in China, only Guangzhou carbon emissions exchange is very close to the weak valid state, while the remaining five carbon emissions exchanges fail to reach the weak effective level.As for the analysis on spillover effects of carbon finance trading market, the paper starts from the externality theory and property rights theory, and combing the traditional, summarizes the research literature of the spillover effects of international and domestic relevant carbon finance trading markets through literature research method and method of induction. Next, by using the research method used by Du Li(2014) in the study of mutual influence of carbon emissions and economic growth in the field of carbon trading market research as the reference, the paper selects average monthly spot trading price of five carbon emissions exchanges in China and China’s purchasing manager index as the samples, and conducts analysis through the empirical methods based on VAR model such as descriptive statistics analysis, AR root analysis, lag order test, Granger causality test, variance decomposition test and impulse response analysis. According to the empirical analysis results, Beijing, Shanghai, Guangzhou, Tianjin and Shenzhen exchanges have certain spillover effects on the real economy, but the current spillover effect is relatively weak. Based on the impulse response analysis, it can be seen that the carbon finance trading market has relatively short time of impact on the real economy in China, mainly because the carbon finance trading market in China was set up relatively later, has relatively single trading products at the beginning of operation, faces inactive trading level, and fails to exert long-term spillover effects on the real economy. Then, the paper analyzes the spillover effect of carbon finance trading market on the meso power industry, financial industry, modern agriculture carbon emissions reduction as well as micro enterprise management and residents living.Finally, the paper summarizes the researches of carbon finance trading market efficiency and spillover effect, takes the construction of carbon finance trading market suitable for China’s national conditions and economic development as the starting point and proposes some policy recommendations. To be specific, China should introduce the related laws and regulations of carbon finance trading, design reasonable reduction mechanism and implementing path, establish unified national carbon trading market, train specialized personnel, innovate carbon finance products, strengthen supervision and build effective regulatory system.