Research On The Market Price Of Carbon Emissions Under The Auction Mechanism

As the one of carbon market pilots in the country,the Shenzhen carbon market has achieved certain results in terms of transaction volume and compliance rate.In the past three years,the price of carbon allowances in Shenzhen carbon emissions trading market has continued to fall,and there has been a trend that the carbon price is significantly lower than the marginal cost of carbon emission reduction.Among them,after the establishment of a national unified carbon market,the retention and conversion of local pilot markets is a key influencing factor,but the basic knowledge of market prices and the balance between supply and demand tells us that the continued decline in the market price of carbon allowances should be closely related to the supply of carbon allowances and the supply methods,such as free or paid.By further analysis,the way in which carbon allowances are provided for compensation will also have an institutional impact on the price changes in the carbon emissions market.Considering that there have been serious carbon allowance market prices in the history of the development of the EU's carbon emission market due to imbalances in supply and demand and unreasonable structure,the comparison and reference methods adopted in this study have studied the problems occurred during the development of Shenzhen's carbon emission market.This study is mainly carried out from the following four aspects: First,using the variance ratio test to verify the efficiency of the EU carbon market and the Shenzhen carbon market;the basic assumption of this paper is that the supply of carbon allowances in the carbon emission market depends on the determination of governments or economies to implement carbon emission reductions.Under the condition of free supply,there will be a systematic deviation between the supply of carbon allowances and the emission reduction capacity of enterprises.The traditional baseline system principle does not fully reflect the industry's marginal carbon emission reduction costs.Therefore,there will be structural deviations between the total carbon quotas and the industrial sectors.Under this condition,the carbon trading market will be trapped into the state of invalid market due to insufficient information.Therefore,whether the carbon emission market is an effective market from should be the starting point of this study both in theory and in practice.The second is to launch a theoretical analysis of the auction mechanism.Adopting Granger causality test to analyze the impact of changes in auction price and changes in auction transaction volume on price changes in the EU's secondary carbon market based on EU auction and carbon price data from 2013 to 2019.Next,using supply and demand theory to study the impact of supply quota reduction on the EU secondary carbon market price.Finally,using HP filter analysis to filter and decompose the price in Shenzhen secondary carbon market into trend items and volatility items.Trend items are fitted with exponential functions,and volatility items are fitted with ARMA models.After that,this study also revised the Shenzhen carbon market forecasted price trend and fluctuation range in the case of supply quota reduction and gives the predicted value and fluctuation range of price in Shenzhen carbon market corresponding to a certain amount of allowance reduction.Finally,this study suggests that the EU carbon market and the Shenzhen carbon market do not meet the weak-efficiency market conditions in the mass and cannot rely on automatic adjustment to achieve market clearance,which requires to improve the sufficiency and transparency of market information to form a reasonable total carbon quota and structural supply and finally to achieve market effectiveness;changes in auction prices and changes in auction volume are not Granger reasons for changes in secondary carbon market prices.Compared with the baseline allocation,the auction introduces the company's marginal emission reduction capacity and cost,and can find true information on the total carbon emission allowances and industry structure.Accordingly,the relevant departments of the Shenzhen carbon market should appropriately reduce the quota ceiling,increase the auction allocation ratio of the carbon market,alleviate the current situation that the price in the Shenzhen carbon market does not match the marginal emission reduction costs,implement a sealed unified auction method and increase the auction allocation ratio of the carbon emission market,in order to early realize the integration with the international market.