Carbon emission price and stock price of energy-chemical Industry in China

Carbon emission price and stock price of energy-chemical Industry in China

As global warming continues to intensify, how to prevent climate deterioration has become a serious concern for all countries. In recent years, although China’s GDP has leap to the second place in the world after the United States, it is accompanied by serious problems of environmental pollution and energy consumption with the rapid development of the economy. Under the common goal of global energy conservation and emission reduction, China has established seven carbon trading markets. Because the energy-chemical industry is a major concern for emission reduction and the carbon trading market has market regulation functions, examining the relationship between them is of great significance and can help the emission reduction effort. This study investigates the relationship between the carbon emission price of China's carbon trading market and the stock price of 30 listed companies in the energychemical industry. We use daily data to establish a panel model and var model, and　then compare it with European Emissions Trading Scheme (EU-ETS). The result indicates that there is an asymmetric one-way relationship between the carbon emission price and the stock price of the energy-chemical industry in China. The main reason is that the internal endogenous mechanism and external response mechanism of the carbon trading market are not perfect. Then the government should improve relevant legal system and trading system, and furthermore, introduce third-party institutions and strengthen talent pools.

Creators Lyu Jingye

Creators Cao Ming

Creators Dong Xiao