TY - JOUR
T1 - The priority of industrial sector coverage in China's national emission trading system
T2 - an application of the LASSO model
AU - Wang, Huayun
AU - Xu, Youzong
AU - Cao, Yunfei
AU - Yang, Ping
N1 - Publisher Copyright:
© 2023. The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.
PY - 2024/1/1
Y1 - 2024/1/1
N2 - This paper estimates the influences of different industries on the carbon prices and selects the industries with high market power in the carbon market. To realize price discovery in the carbon market and improve the market efficiency, we suggest that industries with higher market power should be included in the market prior to other industries. Using the LASSO regression to analyze the data from the pilot markets of China's ETS and related industrial product outputs, we find that among all related industries, the petrochemical and chemical industries affect the carbon price the most and hence should be included in China's ETS with priority. The power generation industry, though regarded as the major entity of emission control, imposes weaker influences on the carbon price. Industries that may be incorporated in China's ETS later include the transportation equipment manufacturing and the mining and metal industries.
AB - This paper estimates the influences of different industries on the carbon prices and selects the industries with high market power in the carbon market. To realize price discovery in the carbon market and improve the market efficiency, we suggest that industries with higher market power should be included in the market prior to other industries. Using the LASSO regression to analyze the data from the pilot markets of China's ETS and related industrial product outputs, we find that among all related industries, the petrochemical and chemical industries affect the carbon price the most and hence should be included in China's ETS with priority. The power generation industry, though regarded as the major entity of emission control, imposes weaker influences on the carbon price. Industries that may be incorporated in China's ETS later include the transportation equipment manufacturing and the mining and metal industries.
KW - Carbon price
KW - Industrial sector
KW - LASSO regression
KW - Pilot carbon market
KW - Priority of inclusion
UR - http://www.scopus.com/inward/record.url?scp=85182740301&partnerID=8YFLogxK
U2 - 10.1007/s11356-023-30681-8
DO - 10.1007/s11356-023-30681-8
M3 - Article
C2 - 38015399
AN - SCOPUS:85182740301
SN - 0944-1344
VL - 31
SP - 594
EP - 608
JO - Environmental Science and Pollution Research
JF - Environmental Science and Pollution Research
IS - 1
ER -