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.

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.

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.

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.

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.

A Global Emissions Trading Scheme?Fantasy and Reality

Many have argued that the international community shouM establish a global emissions trading scheme （ETS） to reduce emissions and streamline efforts to mitigate climate change. This paper argues against establishing such global ETS for the following reasons： （1） a global ETS may assist developed countries in cutting emissions abatement cost, but it may also result in deterioration in the welfare of developing countries; （2） each nation participating in providing global public goods shall be dedicated to forming ＂Lindahl equilibrium＂ under the principle of common but differentiated responsibility, rather than the ＂Walrasian equilibrium ＂, which is represented in a global ETS,＂ （3） the establishment of a global ETS has its driving forces as it is seen as a preferred regulatory form for industrial special interest groups in developed economies, since its benefits is biased rather than promoting global economic and environmental efficiency; and （4） the developing countries shouM be more cautious when designing tools of climate policies and need to avoid to be locked in emission trading systems.

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.

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.

Carbon trading thickness and market efficiency in a socialist market economy

Unlike the European Union emission trade system(EU ETS), China s pilot ETSs implemented diversified policy designs instead of using a uniform framework. Variance ratio test is used to evaluate the Efficient Market Hypothesis(EMH) in China's carbon trading markets. The results of two versions of variance ratio tests indicate that the carbon trading market in Hubei is considered weak form efficient, and the socialist market economy does not necessarily lead to market inefficiency in carbon trading markets. Thin trading activities generate market frictions and bias the Efficient Market Hypothesis(EMH) tests.

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.

Study on carbon intensity trading market based on carbon finance mechanism

As the largest developing country in the world, China has not be involved in the obligation of emissions reduction in the （〈Kyoto Protocol）） . But it has become the largest CO2 emissions countries in the world. This makes China confronted with more pressure of carbon emissions reduction in the post-Kyoto era, and face great challenges in response to climate change issues. On one hand, China＇ s economic growth stage has decided that the situation of more energy consumption and increased carbon emissions is diffficult to reverse in the short term; On the other hand, the traditional policy under the control of total amount of carbon emission has largely restricted economic development. If a developing country in economic transition is carried out compulsory absolute amount of carbon reduction policies, its economic activity and social consumption will be imposed additional constraints inevitably, which will eventually lead to lower economic competitiveness and decline in social standards of living. Ultimately it will affect the good effects of carbon emissions reduction, so the policy can not achieve a satisfactory result. This paper introduces the financial mechanism into the carbon market model, extends the time of model from one phase to multi-phase. And this paper tries to establish a cross-time carbon credits trade system, and the current strength of the traditional carbon emission market trade model is extended. The paper designs two type of option mechanism model--call options trade carbon emissions model and put options carbon emissions model. Models＇ results show that choosing options tool to extend our traditional carbon market model can bring following impacts on carbon market development： trade costs have fallen, the carbon intensity also has descended, and has realized the flow of carbon intensity in diffident time; it enables manufacturers to effectively avoid the risk of carbon emissions trade; it increases the flexibility and maneuverability of the carbon trade market. Finally, the policy recommendations in the financial mechanisms carbon market trade are put forward.