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How will policies of China's CO2 ETS affect its carbon price: evidence from Chinese pilot regions
MAN Jiacheng 1 #,LIU Chuanze 2,GOU Zehao 2,YANG Baochen 2 *
1.College of Management and Economics, Tianjin University, 300072;College of Management and Economics, Tianjin University, 300072;Chemical Engineering Department, Texas A&M University, TX77843;College of Management and Economics, Tianjin University, 300072
*Correspondence author
#Submitted by
Funding: National Science and Technology Support Program of China (No.No. 2012BAC20B12)
Opened online:23 August 2017
Accepted by: none
Citation: MAN Jiacheng,LIU Chuanze,GOU Zehao.How will policies of China's CO2 ETS affect its carbon price: evidence from Chinese pilot regions[OL]. [23 August 2017] http://en.paper.edu.cn/en_releasepaper/content/4740228
CO2 Emissions Trading Scheme is a key policy instrument for dealing with increasing greenhouse gas emissions. This work aims at giving some policy recommendations on the design of China's National Emissions Trading Scheme. China's Carbon Emissions Trading Pilots show experience for China's National Emissions Trading Scheme, so it is important to analyze the determinants of the prices in these pilots. Key factors, including economy, energy, climate, and allowance characteristic, are chosen as control variables. We use the difference-in-differences approach to study various policies respectively, including auction, market participants, and carbon forward. Results show that these policies play a big role in the price discovery and stabilization. Auction drives the market price to approach the auction completion price. Carbon price exhibits a negative sensitivity to non-regulated entities' participation and carbon forward. All the significant variables together can reflect most of the pilots' price information. Policies have heterogeneous impacts on carbon price. The finding is robust to alternative specifications.
Keywords:population,resources and environmental economics; price determinant; CO2 allowance; policy effect; China's ETS; DID model

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