The construction of a unified national carbon market is imminent, and the deep study of the integration degree in China's carbon market can provide theoretical support for the construction of a unified national carbon market.Based on the carbon market data of pilot provinces & cities and from a perspective of price transmission mechanism, this paper studies the integration degree in China's carbon market for the first time by the newly developed directed acyclic graph method.It comes to the results as follows:firstly, there have been some achievements in the integration of China's carbon market, but the integration level still remains to be improved; secondly, carbon markets in Hubei and Guangdong provinces have deeper impacts on those in other pilot provinces and cities, and thus the local central trend of China's carbon market is highlighting.From a perspective of rolling time window, it further confirms the robustness of the empirical results above.On this basis, this paper firstly constructs the theoretical framework of China's carbon market price transmission, and further analyzes the transmission mechanism of interaction among the carbon markets through economic fundamentals hypothesis and market contagion hypothesis, and explains the internal reasons for overall low integration degree in China's carbon market and the highlighting local central trend in detail, to provide a theoretical and empirical support for starting up a unified national carbon market.Based on these empirical results above, this paper makes some relevant policy suggestions in five aspects.
The Study on the Integration Degree in China's Carbon Market: Analysis Based on the Sample of Pilot Provinces and Cities
Journal of Finance and Economics Vol. 43, Issue 02, pp. 84 - 96 (2017) DOI:10.16538/j.cnkij.fe.2017.02.006
Cite this article
Xie Xiaowen, Fang Yi, Li Shenglan. The Study on the Integration Degree in China's Carbon Market: Analysis Based on the Sample of Pilot Provinces and Cities[J]. Journal of Finance and Economics, 2017, 43(2): 84–96.
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