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Open AccessArticle

Impacts on CO2 Emission Allowance Prices in China: A Quantile Regression Analysis of the Shanghai Emission Trading Scheme

by Jie Zhang 1,2 and Lu Zhang 1,*
1
School of Business, Hohai University, West Focheng Road 8, Nanjing 211100, China
2
Collaborative Innovation Center for Coastal Development and Preservation, Xikang Road 1, Nanjing 210098, China
*
Author to whom correspondence should be addressed.
Academic Editor: Giuseppe Ioppolo
Sustainability 2016, 8(11), 1195; https://doi.org/10.3390/su8111195
Received: 19 July 2016 / Revised: 2 November 2016 / Accepted: 11 November 2016 / Published: 18 November 2016
(This article belongs to the Section Economic, Business and Management Aspects of Sustainability)
A pilot regional carbon emission trading scheme (ETS) has been implemented in China for more than two years. An investigation into the impacts of different factors on carbon dioxide (CO2) emission allowance prices provides guidance for price-making in 2017 when the nation-wide ETS of China will be established. This paper adopts a quantile regression approach to estimate the impacts of different factors in Shanghai emission trading scheme (SH-ETS), namely, economic growth, energy prices and temperature. The empirical analysis shows that: (i) the economic growth in Shanghai leads to a drop in the carbon allowance prices; (ii) the oil price has a slightly positive effect on the allowance prices regardless of the ordinary least squares (OLS) or quantile regression method; (iii) a long-run negative relationship exists between the coal price and the Shanghai emission allowances (SHEA) prices, but a positive interaction under different quantiles, especially the 25%–50% quantiles; (iv) temperature has a significantly positive effect at the 20%–30% quantiles and a conspicuous negative impact at the right tail of the allowances prices. View Full-Text
Keywords: SH-ETS; CO2 allowance prices; economic growth; energy prices; temperature; quantile regression SH-ETS; CO2 allowance prices; economic growth; energy prices; temperature; quantile regression
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MDPI and ACS Style

Zhang, J.; Zhang, L. Impacts on CO2 Emission Allowance Prices in China: A Quantile Regression Analysis of the Shanghai Emission Trading Scheme. Sustainability 2016, 8, 1195.

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