The Impact Of Carbon Emission Price On Enterprise Value

With the popularity of the concept of low-carbon economy and the development of global carbon trading,more and more attention has been paid to the impact of carbon emission price on Enterprise Value.Western scholars have studied the influence factors of carbon emission rights price and carbon futures price,and gradually expanded to the relationship between carbon emission rights price and enterprise value.Compared with the European Union’s carbon trading,China’s carbon trading started late,and it is still in the exploratory stage.Domestic research mainly focuses on qualitative analysis of the carbon market,and there are few paper study the relationship between carbon emission price and Enterprise Value.Therefore,based on the free cash flow theory and cash flow discount model,This paper constructs a theoretical and empirical analysis of "Carbon Emission Price-Free Cash Flow-Enterprise Value",which will enrich the study of the relationship between carbon emission price and enterprise value,promote enterprises’ attention to carbon emission reduction and provide suggestions for the establishment of national carbon emission system.This paper proposes a theoretical framework for the effect of carbon emission rights price on enterprise value through free cash flow,and empirically analyses the impact of carbon emission rights price on enterprise value by taking listed enterprises of five carbon emission trading pilot in Shenzhen,Guangdong,Shanghai,Beijing and Hubei as samples,and empirically tests the impact mechanism of free cash flow.Meanwhile,this paper discusses the relationship of carbon emission rights price and enterprise value between when the industries to which the enterprise belongs with different carbon emission levels and when enterprise from different carbon pilot projects,and passes the robustness tests.The results show that:(1)carbon emission price is negatively correlated with enterprises value,and it also verifies the intermediary role of free cash flow in the process of carbon emission price affecting enterprise value,which supports the impact mechanism proposed in this theoretical analysis framework;(2)compared with the low-carbon industry,the price of carbon emission rights does not have a greater negative impact on the enterprises value of the high-carbon industry;(3)when divided into five groups according to carbon pilot projects,the empirical results show that carbon emission price has different impact on enterprises value in different carbon pilot projects.In view of these,it is suggested that enterprises should invest in low-carbon technology or use energy-saving and emission-reduction equipment,which can improve their utilization of energy,reduce carbon emissions,and reduce carbon costs to improve their enterprises value and competitiveness;the government should use appropriate policy,combined with market-oriented means to guide the development of low-carbon technology,and encourage social capital to cooperate with them to invest in the field of new energy;the national carbon trading system should be more cautious in designing carbon quota methods,referring to the successful cases of carbon quota in the European Union’s foreign carbon market and drawing lessons from domestic carbon pilot projects,so that the price of carbon emission rights can reflect its real value,so as to encourage enterprises to reduce carbon emissions and guide the transformation of China’s green economy.