To better establish a unified carbon market in China, this study evaluates the effect of current carbon trading policy and further investigates the relationship between such policy that is published during the second phase of Shanghai Environment and Energy Exchange (SEEE) and Shanghai Emission Allowance (SHEA) price. We aim to analyze whether these policies can improve the operation efficiency of current carbon market. By the Mean Reversion Test, Cox-Ingersoll-Ross (CIR) Model, and Event Study Method, we first analyze the potential price discovery function of SHEA products, thereby describing the transmission channel of current policy to SHEA price. Then we examine the effect of carbon policies published in different periods on their corresponding SHEA price. By the Auto-correlation Test and CIR simulation, we find that 3/4 of all auto-correlation values are less than 0 after Apr. 2017, and the minimum cumulative error is 31.3792 under the supply and demand channel. These findings imply that SHEA price has the discovery function at the middle and end of trading period, and the current policy affects SHEA price through its effect on the fundamentals of supply and demand. Further, more than 60% of all r-values (r-value that reflects the response of price to policy) are less than 1, which implies that the published policy will improves future SHEA price. Accordingly, we argue that SEEE belongs to a policy-oriented market, and the change of carbon price is closely related to emission allocation policies. In this case, China's government should further push forward the smooth operation of current carbon market by the aid of incentive policy in the coming period.
Journal of Cleaner Production – Elsevier
Published: Apr 20, 2018
It’s your single place to instantly
discover and read the research
that matters to you.
Enjoy affordable access to
over 18 million articles from more than
15,000 peer-reviewed journals.
All for just $49/month
Query the DeepDyve database, plus search all of PubMed and Google Scholar seamlessly
Save any article or search result from DeepDyve, PubMed, and Google Scholar... all in one place.
Get unlimited, online access to over 18 million full-text articles from more than 15,000 scientific journals.
Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.
All the latest content is available, no embargo periods.
“Hi guys, I cannot tell you how much I love this resource. Incredible. I really believe you've hit the nail on the head with this site in regards to solving the research-purchase issue.”Daniel C.
“Whoa! It’s like Spotify but for academic articles.”@Phil_Robichaud
“I must say, @deepdyve is a fabulous solution to the independent researcher's problem of #access to #information.”@deepthiw
“My last article couldn't be possible without the platform @deepdyve that makes journal papers cheaper.”@JoseServera