The purpose of the paper is to establish national carbon emissions prices for the People’s Republic of China, which is one of the world’s largest producers of carbon emissions. Several measures have been undertaken to address climate change in China, including the establishment of a carbon trading system. Since 2013, eight regional carbon emissions markets have been established, namely Beijing, Shanghai, Guangdong, Shenzhen, Tianjin, Chongqing, Hubei and Fujian. The Central Government announced a national carbon emissions market, with power generation as the first industry to be considered. However, as carbon emissions prices in the eight regional markets are very different, for a variety of administrative reasons, it is essential to create a procedure for establishing a national carbon emissions price. The regional markets are pioneers, and their experience will play important roles in establishing a national carbon emissions market, with national prices based on regional prices, turnovers and volumes. The paper considers two sources of regional data for China’s carbon allowances, which are based on primary and secondary data sources, and compares their relative strengths and weaknesses. The paper establishes national carbon emissions prices based on the primary and secondary regional prices, for the first time, and compares both national prices and regional prices against each other. The carbon emission prices in Hubei, Guangdong, Shenzhen and Tianjin are highly correlated with the national prices based on the primary and secondary sources. Establishing national carbon emissions prices should be very helpful for the national carbon emissions market that is under construction in China, as well as for other regions and countries worldwide.

Additional Metadata
Keywords Pricing Chinese carbon emissions, National pricing policy, Energy, Volatility, Energy finance, Provincial decisions
JEL Time-Series Models; Dynamic Quantile Regressions (jel C22), Financial Econometrics (jel C58), Asset Pricing (jel G12), Hydrocarbon Resources (jel Q35), Government Policy (jel Q48)
Persistent URL hdl.handle.net/1765/105880
Series Tinbergen Institute Discussion Paper Series , Econometric Institute Research Papers
Citation
Chang, C-L, Mai, T.K, & McAleer, M.J. (2018). Establishing National Carbon Emission Prices for China (No. EI2018-15). Econometric Institute Research Papers. Retrieved from http://hdl.handle.net/1765/105880