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Energies 2018, 11(6), 1501;

Network Features of the EU Carbon Trade System: An Evolutionary Perspective

Institute of Science and Development, Chinese Academy of Sciences, Beijing 100190, China
School of Humanities and Economic Management, China University of Geosciences, Beijing 100083, China
School of Public Policy and Management, University of Chinese Academy of Sciences, Beijing 100049, China
Author to whom correspondence should be addressed.
Received: 28 April 2018 / Revised: 2 June 2018 / Accepted: 5 June 2018 / Published: 8 June 2018
(This article belongs to the Special Issue Lessons from the Evaluation of Existing Emission Trading Schemes)
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In this paper, a network model is constructed using real trading data from the EU carbon market. Metric indicators are then introduced to measure the network, and the economic meanings of the indicators are discussed. By integrating time windows with the network model, three types of network features are examined: growth features, structural features, and scale-free features. The growth pattern of the carbon trading network is then analyzed. As the market grow, the geodesic distances become shorter and the clustering coefficients become larger. The trends of these two indicators suggest that the market is evolving towards efficiency; however, their tiny changes are insufficient to have significant impact. By modeling the heterogeneity of the carbon trading network, we find that the trading relationships between firms obey a broken power law model, which consists of two power law models. The broken power law model can be approximately defined as a traditional power law but with a longer tail in distribution. Furthermore, we find that the model is valid for most of the time of both phases, the model only invalid when the market approaches a high growth rate. View Full-Text
Keywords: emission trading scheme; carbon market; network analysis; network features; scale-free network emission trading scheme; carbon market; network analysis; network features; scale-free network

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Liu, Y.; Gao, X.; Guo, J. Network Features of the EU Carbon Trade System: An Evolutionary Perspective. Energies 2018, 11, 1501.

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