Abstract
Facing the huge pressure of emission reduction, China officially launched a national carbon emission trading system at the end of 2017. The power industry is an important breakthrough in the construction of China's carbon emission trading system. To push the optimization of the power structure through carbon constraint is the necessary path to promote the transformation of the power industry from fossil energy to clean and low-carbon energy. From the perspective of power consumption, this paper constructs the linkage mechanism model of China's carbon emission trading market, energy market and capital market and applies the DCC-MVGARCH model to analyze the dynamic linkage mechanism of the three markets. The results show that the price fluctuation of the yield series of products in each market has clustering characteristics, and the dynamic correlation has significant time-varying characteristics and persistent characteristics. The dynamic conditional correlation between the carbon emission trading market and the oil market and between the carbon emission trading market and the natural gas market are basically consistent. The dynamic correlation coefficient between the carbon emission trading market and the capital market is negative, which is related to the unreasonable quota setting in China's carbon emission market. On the basis of empirical analysis, the optimal balance weight and the optimal hedging ratio of each asset are determined.
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