Empirical Study On The Effectiveness Of China's Carbon Trading Pilot Market

With the growing global warming problem,the international carbon emissions trading market has been established gradually,and the construction of market mechanism has been improved day by day and the market size has been expanded continuously.As the world’s largest carbon emissions developing country,it is a matter of time to enter the ranks of absolute emission reduction countries.So China will face enormous pressure to reduce emissions in the future.China has established seven pilot carbon trading markets,today the major pilot carbon trading markets have been running for about three years.On September 25,2015,Chinese President Xi Jinping and US President Barack Obama issued a joint statement on the issue of climate change between China and the United States in Paris,China promised to start a national carbon trading system in 2017,which means that China will run into a new era of low carbon in the next five years,low carbon economic development will become one of the key task of the 13th Five-Year Plan.Therefore,the study of international advanced carbon emissions trading system and experience and lessons of the domestic carbon trading pilot market is necessary,we should also analyze the effectiveness of domestic carbon trading pilot market and its corresponding carbon trading market system,so these can provide theoretical basis and data support to build and run the national carbon trading system.This paper has five chapters.The first chapter summarizes the current research situation of the domestic and foreign about the effectiveness of the carbon trading market and the market mechanism,and leads the research direction,and then elaborates the research content and research method of the paper.The second chapter analyzes the basic situation of the European carbon trading system and the carbon trading market in China,summarizes the experience and existing problems of China’s carbon trading market,and draws lessons from the successful experience of the EU carbon trading market.The third chapter is about the theory of the effectiveness and the carbon trading market.First,this chapter reviews the origin of carbon market theory,then leads to the basic conditions,assumptions and three effective forms of market effectiveness,and discusses the test method of market effectiveness.According to the qualitative analysis,it is concluded that the pilot market of China`s carbon trading is not a strong or semi-strong effective market,and finally turn to quantitative test of the carbon trading market about weak effective.In the fourth chapter,according to the test method in Chapter 3,it selects the seven existing carbon trading pilot market in China as the research objects,and do quantitative statistics test to these seven carbon trading pilot market,it analyzes the statistical characteristics of the volume and the transaction price,and infers that these markets belong to "Weak" trading market and the transaction price rates do not meet the normal distribution characteristics,so this paper select the weekly rates of return as the objects,then use the variance test method to verify the weak effectiveness of the periodic markets.The results show that at the first stage of the pilot market in the carbon trading market(the first year of the pilot market opening),only the Shanghai carbon trading pilot market has reached the weak effectiveness;in the second stage(the pilot opened a year later),only Shanghai and Guangdong carbon trading pilot markets have reached the weak effectiveness.The other five carbon trading pilot markets have not achieved the weak effectiveness.According to this study,it concludes that the influencing factors of the market effectiveness are in the following aspects:first,flexible paid distribution and longer distribution period of carbon quota;second,form a mechanism to reduce the cost of market information acquisition of participants;third,provide the more total quota and expand the quota of a single transactionsubject effectively;fourth,to amend the market trading rules,andimplement a flexible compliance date and relatively strong penalty system;fifth,clarify the government’s regulatory mechanism for carbon trading market,reduce the government intervention appropriately,give full play to the internal regulation function of the market.Finally,this paper puts forward the policy suggestions on the construction of the national unified carbon market from the aspects of market construction,transaction subject,transaction mode,transaction variety and financial service,to improvethe efficiency of China’s carbon trading market gradually.