Analysis of the Effectiveness of Carbon Emission Trading Market in China

• Published in: Procedia computer science 2023, Vol.221, p.1440-1447
• Main Authors: Yu, Anqi, Peng, Shuyang, Li, Yizhi (Jasmine), Guo, Kun
• Format: Article
• Language: English
• Subjects: market effectiveness; rescaled range analysis; variance ratio test
• ISSN: 1877-0509; 1877-0509
• DOI: 10.1016/j.procs.2023.08.136

As global climate change intensifies, carbon emissions trading has become an important tool for countries to address climate change. China, as the world's largest carbon emitter, has been conducting carbon trading pilots since 2011, and officially launched a national carbon market in 2017. The construction of China's carbon market is crucial for China and global efforts to address climate change. Market efficiency is a key indicator of its success. This article aims to measure and analyze the effectiveness of China's carbon market, and to explore policy measures to enhance its effectiveness. It selected data from effective trading days and conducted an exploratory study on the effectiveness of China's pilot carbon markets. To analyze the effectiveness of the carbon market, we combined the efficient market hypothesis theory with the fractal market hypothesis theory, adopted the variance ratio test method, and the rescaled range analysis method to conduct a comprehensive analysis of the Chinese carbon market, while also accounting for the reasons behind their computational inconsistency. As our research shows that China's pilot carbon market has not reached the weak efficiency level, we have provided some suggestions based on the current operational status of China's carbon market.