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The Influencing Factors of China Carbon Price: Analysis Based on GLS Model

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DOI: 10.23977/icemgd.2019.012

Author(s)

Lanjie Wang

Corresponding Author

Lanjie Wang

ABSTRACT

China has officially launched seven carbon trading systems and established a national carbon trading market. Using market mechanism to control and reduce greenhouse gas emissions and promote green and low-carbon development is a major innovation practice. As the core of carbon trading market, carbon trading price plays a vital role in the healthy development of China's carbon market. This paper studies the influencing factors of carbon trading price. This paper selects and analyzes the panel data regression model of each factor, and uses GLS model to extract the data of seven carbon trading pilot projects in China. This paper analyses the factors affecting China's carbon price in terms of carbon price, Daqing crude oil Spot Price, China Coal Price Index, Nymex Natural Gas Futures Price, Exchange rate (with European), Shanghai-Shenzhen 300 index, weather and industrial added value. In general, energy price has the greatest impact on carbon trading price, while Euro exchange rate and Shanghai Stock Exchange Index have little impact on carbon price. Also, the weather in Hubei has a significant impact on carbon trading prices. Finally, this paper gets the conclusion that the carbon trading market should be capitalized instead of being guided by the government.

KEYWORDS

Carbon Price; Influencing factors; GLS Model; China

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