Analysis models for China's carbon trading market: comparison and outlook

Abstract

At the national and international levels, human-induced climate change has become a significant political concern, with the large rise in carbon dioxide concentration being a pressing issue that must be addressed. Carbon trading has shown to be one of the most successful strategies to accomplish energy saving and emission reduction as a flexible tool for dealing with climate change. As the nation with the highest carbon emissions today, China’s research on its carbon trading market has a guiding significance to the globe. The study findings of different models focusing on carbon trading markets are presented from three aspects: carbon emission reduction efficiency, carbon market efficiency, and internal information change trends in the carbon market. The results show that the efficiency of China’s pilot carbon market is currently poor, with just a mediocre efficiency attained. The existing carbon market’s key issues are its low transaction volume and weak market liquidity. Based on the comprehensive review of and comparison among existing models studying the carbon trading market, we proposed plausible suggestions for future research directions and development methods of the carbon trading market, including the utilization of carbon tax, improved market transparency, and government oversight.