Risk Analysis Of Carbon Trading Market In China's Pilot Areas

Carbon trading market can be effective to deal with environmental problems.In recent years,with the increasing concern of the international community for climate and environment and the rapid development of international carbon market,the carbon market and its financial properties have become important research objects in the field of energy economy.Compared with other financial markets,the price fluctuation of the carbon market involves a wider range.Besides the factors affecting the volatility of the asset price in the general financial market,it is also influenced by the climate change negotiations,and presents the representative characteristics of the complex system,such as non-linearity,uncertainty,comprehensiveness and dynamic property.The volatility of carbon price is high and the market risk is self-evident.With the emergence of a large number of new carbon markets in the international community,the carbon market has covered wider and wider areas.Compared with 12 years ago,the carbon market has increased by two times the proportion of carbon emissions in the world.At the end of last year,China started the national carbon market.First of all,the power generation industry was launched.There is no doubt that China's action conveys a positive signal to the international community about energy conservation and emission reduction.Based on the establishment of China's unified carbon market and the background of complex system in the carbon market,the carbon trading market of 4 pilot provinces and cities in China is taken as the research object centering on the carbon market risk.Based on the relative theories of carbon trading,the present situation of carbon trading market in China's pilot provinces and cities is analyzed,and the status of the carbon trading market in the pilot provinces and cities of China is compared with the EU carbon trading market.On the basis of this,it summarizes the challenges faced by China's unified carbon market.Then,the Va R model,the generalized extreme value theory and the GARCH model are used to measure the risk of carbon trading market in China's pilot provinces and municipalities,so as to further explore the policy proposals for building a unified carbon market in China.Through the study,we find that the four market spot price volatility sequences show the typical characteristics of peak,thick tail,auto-correlation,volatility clustering and conditional variance.The risks faced by different carbon markets are different,and the GARCH-GEV-Va R model can accurately measure the market risk under extreme conditions.Therefore,the participants in the pilot provinces and the newly established unified carbon market can quantify and control the risk of the volatility in the carbon market through the GARCH-GEV-Va R model.Finally,on the basis of the above analysis,we put forward suggestions for building a unified carbon market in China.