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.

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.

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.

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.

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.

Policy Diffusion of the Emission Trading Scheme in China:Progress and Prospects

Chinese national emissions trading scheme(ETS)of greenhouse gas(GHG)was scheduled to start simulation trading in the power sector in 2020.Now it is good timing to review its progress and prospect.This study first examines policy diffusion in relation ETSs in China and particularly those for CO2 emissions,including the causes,determinants,process,and impacts.It argues in a centralized political system with highly and widely differentiated local circumstances,policy diffusion is progressed through a more complicated process,presented as a three-tier process in the paper,illustrating how international arrangement,national jurisdiction,and local administration interact and influence policy-making in a follower’s jurisdiction.China,which is now the biggest GHG emitter,has been preparing to establish a national ETS since 2017.So far,eight sub-national governments have introduced ETS pilot programs to feedback their experiences and to determine best practice for the national scheme.These eight pilots,especially the relatively successful ones,are found to be motivated by a competitive relationship that aims to stabilize its carbon market,which may eventually contribute to the progress of policy diffusion of the ETS in China.

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.

What role do emission trading schemes,energy innovation,and technology transfer play in sustainable recovery?A perspective from BRICS economies

To ensure long-run sustainability,it is imperative to achieve the goal of zero-carbon emissions without compromising economic growth.Identifying whether BRICS economies,which are an attractive set of countries due to their rapid economic growth and high emissions,can shift towards sustainability with the support of policy measures,is a question which needs to be addressed.This article investigates the impact of emission trading schemes,energy innovation,technology transfer,population growth,and inflation on the economic performance of BRICS economies(2001-2020).The outcomes of the CS-ARDL and PMG estimators reveal that carbon taxes,carbon finance,energy innovation,technology transfer,population growth,and inflation have positive effects on economic performance.In light of the evidence,policy insights are recommended to achieve a win-win situation for economic and environmental performance.

Simulation analysis on policy interaction effects between emission trading and renewable energy subsidy

Greenhouse gas emission regulation and renewable energy promotion policies have been implemented in many countries.Yet these two kinds of regulation policies have complex interactions between each other,and can either enhance or reduce the overall emission reduction efficiency.If not well tuned,these regulation policies may deviate from their original intention and lead to unnecessary social cost.Hence,the policy effectiveness,cost effectiveness,and dynamic efficiency of different policy mixtures between emission trading and renewable energy subsidy are studied based on a novel dynamic simulation platform of power economy and power system.Simulation results show that these two kinds of regulation policy can coexist,but a good coordination between the emission trading and the renewable energy subsidy can achieve better emission reduction outcomes.

Emission Trading Based Optimal Scheduling Strategy of Energy Hub with Energy Storage and Integrated Electric Vehicles

This paper focuses on the optimal scheduling of the district energy system with multiple energy supply modes and flexible loads.For multi-energy system(MES),the energy hub(EH)model including energy storage system and integrated electric vehicle(EV)is established.Based on the model,the influence of pollutant trading market on total operation cost is analyzed,and the optimal scheduling strategy is further put forward to realize the minimum purchase cost and emission tax cost of the MES.Finally,this paper compares the economic benefit of the fixed mode and the response mode,and discusses the contribution of the energy storage device and the multi-energy complementary mode to energy utilization efficiency.The simulation results indicate that optimal scheduling strategy of the EH can coordinate various energy complementary modes reasonably.Meanwhile,the proposed strategy is able to improve the operation economy of the EH,and ensure the better response effect of the demand side.The sensitivity analysis demonstrates the impact of pollutant emission price change on emission reduction.

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.

The validity of carbon emission trading policies:Evidence from a quasi-natural experiment in China

This study focuses on the validity of carbon emission trading policies(CETP).CETP aims to adjusting the consumption structure of clean energy and promoting the transformation of green technology to achieve regional CO2 and SO2 reduction.Using difference-in-difference(DID)and spatial panel model,we estimated the abatement effect of CETP,the influence mechanism of regional CO2 and SO2 policies,environmental and economic compatibility with provincial panel data in China from 2005 to 2017.The results show that the CETP can effectively decrease regional CO2 and SO2 emissions in pilot areas by 19.1%and 37.0%respectively when considering spatial correlation of CO2 and SO2 emissions.From 2014 to 2017,the values of CO2 reduction effect are−0.139,−0.146,−0.187 and−0.206 respectively,indicating the abatement effect increases gradually.CETP can promote 6.1%of the ratio of clean energy consumption and 4.6%of the rate of green technology.In addition,further benefit analysis shows that CETP can improve 12.4%of regional economic output and residents'health by reducing regional CO2 and SO2 emissions,and effectively benefit high-quality economic growth.

Temporal dimension and water quality control in an emission trading scheme based on water environmental functional zone

Emission trading is one of the most effectivealternatives to controlling water pollution.Water environmentalfunctional zone(WEFZ)is used to determine thewater quality standard and identify the zone boundary foreach river or reach.In this study,a new emission tradingscheme was addressed based on WEFZ,accounting forboth the temporal dimension and water quality control.Atemporal factor of emission trading was proposed based onvariations in the environmental capacity within a year bydividing the year into three periods,including high,normal,and low periods of environmental capacity.Duringeach period,emission trading was implemented exclusively.A water quality-control scheme was suggestedbased on the water quality requirement in the waterfunctional zone,in which the water quality at thedownstream boundary of the zone was required to meetthe water standard following auto-purification in thestream.Two methods of calculating water quality controlare addressed for point-source pollution and non-pointsourcepollution.The calculated temporal dimension andwater quality control were located in Dongxi River of theDaning Watershed in the Three Gorges Watershed.Thehigh period was during June,July,and August,the normalperiod was during April,May,September,and October,and the low period was during January,February,March,November,and December.The results from the waterquality calculation demonstrated that the discharge ofpoint-source and non-point-source pollutions led to anexcess of common contaminants at the downstreamboundary of WEFZ.The temporal and spatial factorsabove should be incorporated into the emission tradingscheme based on WEFZ.

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.

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 trading system of China： a linked market vs. separated markets

The Chinese government intends to upgrade its current provincial carbon emission trading pilots to a nationwide scheme by 2015. This study investigates two of scenarios： separated provincial markets and a linked inter- provincial market. The carbon abatement effects of separated and linked markets are compared using two pilot provinces of Hubei and Guangdong based on a computable general equilibrium model termed Sino- TERMCo2. Simulation results show that the linked market can improve social welfare and reduce carbon emission intensity for the nation as well as for the Hubei-Guangdong bloc compared to the separated market. However, the combined system also distributes welfare more unevenly and thus increases social inequity. On the policy ground, the current results suggest that a well-constructed, nation- wide carbon market complemented with adequate welfare transfer policies can be employed to replace the current top-down abatement target disaggregation practice.

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.

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.

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.

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.