Carbon emission trading system and stock price crash risk of heavily polluting listed companies in China:based on analyst coverage mechanism

This study reveals the inconsistencies between the negative externalities of carbon emissions and the recognition condition of accounting statements.Hence,the study identifies that heavily polluting enterprises in China have severe off-balance sheet carbon reduction risks before implementing the carbon emission trading system(CETS).Through the staggered difference-in-difference(DID)model and the propen-sity score matching-DID model,the impact of CETS on reducing the risk of stock price crashes is examined using data from China’s A-share heavily polluting listed companies from 2007 to 2019.The results of this study are as follows:(1)CETS can significantly reduce the risk of stock price crashes for heavily polluting companies in the pilot areas.Specifically,CETS reduces the skewness(negative conditional skewness)and down-to-up volatility of the firm-specific weekly returns by 8.7%and 7.6%,respectively.(2)Heterogeneity analysis further shows that the impacts of CETS on the risk of stock price crashes are more significant for heavily polluting enterprises with the bear market condition,short-sighted management,and intensive air pollution.(3)Mechanism tests show that CETS can reduce analysts’coverage of heavy polluters,reducing the risk of stock price crashes.This study reveals the role of CETS from the stock price crash risk perspective and helps to clarify the relationship between climatic risk and corporate financial risk.

Construction of legal system of carbon emissions trading in China

Countries in the world have taken a variety of means to control carbon emissions based on the serious situation of global warming,the concept of low-carbon economy and the provisions about emissions in the United Nations Framework Convention on Climate Change(UNFCCC) and the Kyoto Protocol.With the measures of emissions reductions,the system of carbon emissions trading is taking shape.It is necessary for China as the big natural resources consumption country to establish its own carbon emissions trading system.By introducing the carbon emissions trading system of the European Union,America and Japan,and analyzing the market and policies been formed,the carbon emissions trading system in China can be established from the initial configuration of the emissions rights,the subject and object of carbon emissions trading,establishing the carbon emissions trading exchange and supervising and regulating the carbon emissions trading.

Daily rolling estimation of carbon emission cost of coal-fired units considering long-cycle interactive operation simulation of carbon-electricity market

The high overlap of participants in the carbon emissions trading and electricity markets couples the operations of the two markets.The carbon emission cost(CEC)of coal-fired units becomes part of the power generation cost through market coupling.The accuracy of CEC calculation affects the clearing capacity of coal-fired units in the electric power market.Study of carbon–electricity market interaction and CEC calculations is still in its initial stages.This study analyzes the impact of carbon emissions trading and compliance on the operation of the electric power market and defines the cost transmission mode between the carbon emissions trading and electric power markets.A long-period interactive operation simulation mechanism for the carbon–electricity market is established,and operation and trading models of the carbon emissions trading market and electric power market are established.A daily rolling estimation method for the CEC of coal-fired units is proposed,along with the CEC per unit electric quantity of the coal-fired units.The feasibility and effectiveness of the proposed method are verified through an example simulation,and the factors influencing the CEC are analyzed.

Carbon emission reduction effect and mechanism test of carbon emission trading pilot

Carbon emission trading pilot policies were launched in seven provinces and cities,including Beijing,Shanghai,Tianjin and Chongqing in 2013.Carbon emission trading is of great significance to the development of green economy.Taking China’s carbon emission trading pilot as a natural experiment,the dual difference method was used to explore the carbon emission reduction effect of the pilot carbon emission trading policy on the pilot areas in China based on the panel data of 30 provinces,autonomous regions and municipalities in China from 2000 to 2019.Propensity score matching,parallel trend test and placebo test were conducted to improve the robustness of the empirical results.It is found that carbon emission trading pilot policies significantly promote carbon emission reduction in pilot areas compared with non-pilot areas.This conclusion from the benchmark regression passed the robustness test,and the carbon reduction effect showed an increasing trend year by year.With the mediation effect test,the carbon emission reduction mechanism of the pilot policy was studied.The results show that the carbon trading pilot policy reduces the carbon dioxide emission in the pilot area by promoting the upgrading of industrial structure and technological progress.

Multi-objective Optimization of Integrated Energy Systems Considering Ladder-type Carbon Emission Trading and Refined Load Demand Response

In this paper,a novel multi-objective optimization model of integrated energy systems(IESs)is proposed based on the ladder-type carbon emission trading mechanism and refined load demand response strategies.First,the carbon emission trading mechanism is introduced into the optimal scheduling of IESs,and a ladder-type carbon emission cost calculation model based on rewards and penalties is established to strictly control the carbon emissions of the system.Then,according to different response characteristics of electric load and heating load,a refined load demand response model is built based on the price elasticity matrix and substitutability of energy supply mode.On these basis,a multi-objective optimization model of IESs is established,which aims to minimize the total operating cost and the renewable energy source(RES)curtailment.Finally,based on typical case studies,the simulation results show that the proposed model can effectively improve the economic benefits of IESs and the utilization efficiency of RESs.

Moderating effect of corporate financialization on the impact of climate policy on corporate green innovation:Evidence from China

With intensifying global climate change,humanity is confronted with unparalleled environmental challenges and risks.This study employs the staggered difference-in-difference model to examine the relationship between climate policy and green innovation in the corporate financialization context.Using Chinese-listed company data from 2008 to 2020,our analysis reveals a favorable correlation between China’s carbon emission trading policy(CCTP)and advancements in green innovation.Furthermore,we find that the level of corporate financialization moderates this correlation,diminishing the driving effect of CCTP on green innovation.Additionally,results of heterogeneity analysis show that this moderating consequence is more evident in non-state owned and low-digitization enterprises compared with state-owned and high-digitization ones.Our findings contribute to the existing literature by clarifying the interaction between CCTP,green innovation,and corporate financialization.Our research provides valuable insights for policymakers and stakeholders seeking to strengthen climate policies and encourages green innovation in different types of businesses.

Inclusion of forestry offsets in emission trading schemes:insights from global experts

Emissions trading schemes(ETSs)have been a central component of international climate change policies,as a carbon pricing tool to achieve emissions reduction targets.Forest carbon offset credits have been leveraged in many ETSs to efficiently meet emission reduction targets,yet there is little knowledge about the perceptions,experiences,and challenges associated with the forest carbon offsetting in existing and pilot ETS.Given that the future inclusion of forest carbon offset in ETS management activities and policies will require strong support and acceptability among the institutions and experts involved in ETS,this study explores the experiences and lessons learned with 16 globally engaging experts representing major existing ETSs(North America,Europe,and New Zealand)and Chinese pilot ETSs towards the inclusion of forestry offsets,major concerns and challenges with existing implementation models.Findings revealed that many respondents particularly from North America,New Zealand,and Chinese pilot systems portrayed positive attitudes toward the inclusion of forestry carbon offsets and its role in contributing to a viable ETS,while European experts were not supportive.Respondents cited leakage,permanence,additionality,and monitoring design features as the major challenges and concerns that inhibit the expansion and inclusion of forest carbon offsetting.Respondents from Chinese pilot schemes referenced a unique set of challenges related to implementation,including the increasing cost of afforestation and reforestation projects,the uncertainty in the future supply and demand for their national Certified Emissions Reduction(CER)scheme and landowner engagement.Existing and future ETSs should learn from and address the challenges experienced by global experts and carbon pricing mechanisms to design,evaluate,or enhance their forest carbon offset programs for an effective and viable system that successfully contributes to GHG mitigation practices globally.We recommend inclusion of forest carbon offsets at the early stages of ETS improves the perceptions and experience of policy makers and practitioners toward the success and potential of forestry offsets in ETS ensuring familiarity and confidence in the mechanism.

Factors affecting the pilot trading market of carbon emissions in China

Climate change and carbon emissions are major problems which are attracting worldwide attention. China has had its pilot carbon emission trading markets in seven regions for more than 3 years. What affects carbon emission trading market in China is a big question. More attention is paid to how China promotes the carbon emission trading schemes in the whole country. This paper addresses concerns about the functioning of carbon emission trading schemes in seven pilot regions and takes the weekly data from November 25, 2013, to March 19, 2017. We employ a vector autoregressive model to study how coal price, oil price and stock index have affected the carbon price in China. The results indicate that carbon price is mainly affected by its own historical price; coal price and stock index have negative effects on carbon price, while oil price has a negative effect on carbon price during the first 3 weeks and then has a positive effect on carbon price. More regulatory attention and economic measures are needed to improve market efficiency, and the mechanisms of carbon emission trading schemes should be improved.

Addressing the trade-climate change-energy nexus: China's explorations in a global governance landscape

We have arrived at a critical juncture when it comes to understanding the numerous ways in which trade interacts with climate change and energy(trade-climate-energy nexus).Trade remains crucial for the sustainable development of the world's greatest trading nation:China.After clarifying the linkages within the trade,climate change and energy nexus,this article delves into China's specific needs and interests related to trade,climate change and energy.Then it explores the ways in which trade can contribute to China's needs,to sustainable energy development and to the goals of the global climate agreement that is under negotiation.One main findings are China is a key participant in negotiations on trade liberalization of environmental technologies and services.These negotiations are in China's interests in terms of innovative industries,technological upgrading,employment and public health.China could stand up for the interests of other emerging and developing countries and serve as an example in terms of transitioning to a low-carbon economy.Beyond trade barriers issues of domestic(energy)regulation such as fossil-fuel subsidies as well as investment,competition-policy,tradefacilitation and transit issues related to clean energy need to be addressed.Building trust between relevant actors across sectors and national borders will be of the essence in order to foster long-term cooperation on technological innovation.As a way forward,different approaches towards the governance of trade and climate change will be highlighted.Besides discussing the specific aspects of Chinese participation in global trade and climate change governance,this paper aims at offering broader insights into the nexus between trade,energy and climate governance in China.

Spatial emission reduction effects of China’s carbon emissions trading:quasi-natural experiments and policy spillovers

Insufficient assessment of emission reduction effects still exists in the carbon emission rights trading system,a major environmental regulation measure in China.Based on the data from the carbon trading pilot covering the years from 2007 to 2017,this study combined the synthetic control method with dynamic spatial Durbin model to comprehensively evaluate the spatial emission reduction effects of carbon trading policies.The results showed that:①The carbon trading policies promoted carbon emission reductions in the pilot regions,among which Tianjin and Hubei responded significantly,and also helped to suppress carbon emissions in the neighboring areas.②Long-term emission reduction effect from carbon emissions trading became gradually significant,while the indirect emission reduction effect was relatively weaker.③In term of reducing carbon emissions,the economic development channel played a key role,but it had a threat to the promotion of carbon emissions in the surrounding areas.Energy consumption was the main obstacle to the growth of carbon emissions.④In the long run,technological progress tended to become the key to the effective implementation of potential emission reduction effects of carbon trading policies.Based on the above findings,we suggest that the construction of a national carbon trading market should be promoted,the balanced development and orderly advancement of regional carbon trading markets should be paid attention to,the coordinated development of green economy as well as knowledge and technology exchange and cooperation among regions should be strengthened to form a low carbon development model among regions.

Booming or sinking: How does an emission trading scheme affect enterprise value?

Unlike prior research that shows climate policy improves enterprise value,this study reveals the negative im‐pact of emission trading schemes(ETSs)on enterprise value under China’s unique institutional backdrop and identifies the mechanism through which this impact occurs.Data from a sample of 1267 listed companies in the Chinese stock market from 2005 to 2018 models are analyzed using difference-in-differences(DID)and propensity score matching methods(PSM).The results suggest that ETSs have an average short-term negative impact on enterprise value,which peaks in the second year of the ETS and diminishes from the fourth year.Further analysis reveals that ETSs did not cause significant operating losses for firms but reduced their value through the market response mechanism.ETS enterprises experienced significant declines in their annual stock transaction amounts and in returns on individual shares.This indicates that investors expect ETSs to ad‐versely affect pilot enterprises and accordingly adopt disinvestment strategies.Despite the short-term negative effect,ETSs effectively encourage enterprises to innovate green technologies to mitigate long-term carbon risk.

Game analysis on constructing the model of an international carbon emissions trading model

Constructing a model for international carbon emissions trading is an effective method to curb global warming through a market mechanism.Although the international carbon emissions market generates substantial profits,the relevant trading mechanism has been far from perfect.The perfect mechanism for international carbon emissions trading should be a revealing preference game.In other words,only if all players in this game truly show their information and preferences can the Nash outcome be Pareto efficient and fair.China should actively participate in the international carbon emissions trading game;promote efficiency,justice,rationality,and the quality of being manipulation-free in the carbon emissions market;and play a more important role in perfecting the international carbon emissions trading mechanism.

Application of Tradable Emission Permits in Europe

The purpose of this study is merely to review the current situation in the designing and implementation of the emission trading programs in Europe. Historical data show that although there is a series of shortcomings in their current functioning, employing such instruments for GHG reduction policy making is strongly expected to be efficient and effective. The European Union Emission Trading Scheme (EU ETS), Clean Development Mechanism (CDM) and Joint Implementation (JI) are just a few examples of the ambitious EU initiative that heavily relies on such instruments. We dwell on their operations and achievements by far and all the content in this article is expected to convince the Chinese government and regional public authorities to take positive actions and attitudes in promoting these instruments.

Review of Carbon Emissions Trading Production Model and Research on Its Applications in China

With the Kyoto Protocol entering into effect in many countries one after another,carbon trading has come into being and developed quickly.China is the main supplier of carbon emissions rights in the world,but such transactions are still in the stage of Clean Development Mechanism (CDM) projects without its own trading system,which is not conducive for China to win the rights of carbon pricing in the international market.Low-carbon and emissions reduction is the international trend nowadays,and therefore,it is particularly necessary and urgent to investigate the issue of carbon trading in China.In this paper,the authors have reviewed Putty-Clay Vintage,which is a model of production function for carbon trading,revealing the main points,contributions and shortcomings of the model.Combined with China's national conditions,the authors have investigated the application of this model in China's carbon trading from four different angles,including enterprise production optimization,financial market development,national macro-economy,and the allocation of emission quota.This study aims to provide China's enterprises with an analytical framework when participating in carbon trading in the future and it is beneficial for them to make optimal production planning when considering the cost of carbon emissions reduction.

Emission trading innovation mechanism based on blockchain

The rationality and scientific nature of the emission trading mechanism is the key to the effective implementation of environmental and economic policies.As far as China is concerned,there are phenomena such as information asymmetry,low supervision efficiency,and alienation of government and enterprise behaviors caused by the incomplete mechanism of emission trading in the practice of different pilots.The introduction of blockchain technology can innovate the traditional transaction model and form a decentralized peer-to-peer transaction and a trusted emission trading market.To this end,based on the current emission trading mechanism and the characteristics of blockchain technology,this paper couples the core technologies of blockchain with the functional requirements of application scenarios.Then,an innovative application framework is built based on the consortium blockchain Fabric from three aspects:emission trading supervision,secondary trading market construction,as well as emission trading incentive and punishment mechanisms.Technologies such as the consensus mechanism,smart contract,Merkle tree and asymmetric encryption are comprehensively applied in this process.In the construction of the blockchain framework of the secondary market for emission trading,institutional changes and innovations brought about by the blockchain at various levels are analyzed in terms of participants,transaction processes and the transaction scope.At the same time,smart contract functions and algorithms are designed for the purchase,transfer-out and trading of emission rights,and the operation business logic of the smart contract is analyzed.On the whole,this paper explores the application framework of blockchain technology in the field of emission trading at the macro level,and analyzes the application mechanism of the corresponding technologies of blockchain at each coupling point in the framework at the micro level.The collaborative analysis at the two levels shows that blockchain technology and the requirements of emission trading mechanism can be effectively coupled,and the application of blockchain technology can promote the effective supervision of enterprises'emission behavior,making the processes of the purchase,transfer and transaction of emission rights intelligent and automated,and providing technical support for cross regional emission trading to reduce transaction costs and management complexity.In addition,the issuance of emission credits based on smart contract will be a new incentive for companies to actively participate in transactions.Based on the above analysis,this paper believes that the innovative application of blockchain technology is of great significance in the promotion of the market-based allocation of element of emission trading and the rational allocation of environmental resources.It will lead to a major breakthrough in the traditional trading system in terms of trading modes,forming a value transmission network of environmental resources between the government and polluters.

Models for Initial Allocation of Emission Permits in a River Basin During Industrial Development:A Case Study of Huaihe River Basin,China

At present,water pollutant emission trading plays an increasingly important role in pollution control in many foreign countries,and its pilot studies and demonstration have also been started in China.In order to solve the problem of initial allocation of emission permits:premise and basis of emission trading in a river basin,basic principles on initial allocation of actual emission permits in China are put forward.And it is thought that local development stage of industry should be taken into full account for initial allocation model of emission permits.There are five different allocation models in different development stages of industry,including models like distribution according to needs,improved same-rate reduction,performance,integration and environmental capacity,etc.The initial allocation of emission permits in various basins should choose a suitable model in accordance with their respective development stages.It is suggested in this article that integrated allocation model should be a main choice for current development stage of industry in China.

Design Issues for Linking Emissions Trading Schemes--A Qualitative Analysis for Schemes from Europe, Asia and North America

The paper focuses on links between the EU ETS （European Union Emissions Trading Scheme） and selected （domestic） greenhouse gas ETS （emissions trading schemes） from Asia and North America which could open up a perspective to keep the idea of emissions trading alive on a global scale and confront the actual uncertainty in future climate policy. The approach consists of investigating qualitatively the essential requirements of this alternative bottom-up approach. It is evaluated if variations or inconsistencies in the structure and design of domestic ETS as well as legal and institutional characteristics harm or facilitate the concept of linking with the EU ETS. The evaluation of systems leads to the exclusion of systems with voluntary character, relative caps, unrestricted borrowing and price caps from the group of potential linking candidates.

Localization Reform of Carbon Emissions Trading Mechanism in China

Based on the practical experiences of Guangdong carbon emissions trading pilot, the key issues such as cap setting, allowance alloca- tion, system defects, regulatory integration and MRV mechanisms were analyzed in this paper from the localization perspective. A number of solu- tions and policy recommendations were also proposed in this study in order to solve these barriers.

Comparison of the ＂Global Levy Scheme＂ with the ＂Emissions Trading Scheme＂ to Reduce Greenhouse Gas Shipping Emissions

Climate change is widely recognized as the major environmental problem facing the globe today. One of the most urgent environmental problems facing shipping industry is the reduction of GHG （greenhouse gas） emissions from its operations. Given the growing concern of the international community on ＂the deep reduction of global GHG emissions＂, it cannot be expected that the non-regulation of maritime GHG emissions can further continue. This paper investigates the main challenges and threats of the development of two MBMs （market-based measures） for the reduction of GHG emissions from international shipping, i.e., the ＂global levy scheme on maritime GHG emissions＂ and the ＂maritime emission trading scheme＂. A SWOT （strengths weaknesses opportunities threat） analysis is used, in this survey, to evaluate the environmental effectiveness as well as the easiness of implementation of the two policy options. Moreover, we make apparent their strengths and weaknesses concerning abatement of maritime GHG emissions. Given the fact that the discussion regarding the implementation of some MBMs with maritime GHG-emission reduction potential is still carried out with the exception of EEDI （energy efficiency design index） and SEEMP （ship energy efficiency management plan）, this paper＇s results present special significance, as they could be further analyzed and taken into account during the adoption of any future MBM for the reduction of maritime GHG emissions.