China's carbon market is pivotal in the global battle against climate change, especially as the world's largest emitter of greenhouse gases. The establishment and effective management of this market are critical for advancing global environmental sustainability. Central to this effort is the carbon trade price (CTP), widely recognized as a key indicator of market fluctuations. In 2022, China's carbon market experienced significant turmoil, contrasting sharply with the resilience of the European carbon market, which demonstrated steady demand and price growth. This article reviews existing literature on the factors influencing CTP, identifying crucial elements such as environmental conditions, policy frameworks, market dynamics, and economic indicators that shape China's Emissions Trading System (ETS). A detailed analysis of these factors for the years 2021 and 2022 is provided. Additionally, I propose further factors that may impact the CTP and offer a series of policy recommendations aimed at enhancing the effectiveness and stability of China's carbon market.
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