Faculty Online Seminar – “Price Stabilization Mechanisms in Emissions Trading Schemes: Design and Performance of China’s Pilot” by Prof. Wang Banban
Following the experience of high price instability and unpredictability in the European Emissions Trading Scheme (ETS), the management of carbon prices is a key concern for Chinese authorities. The objective is to avoid excessive price volatility in daily trading and stabilize the intrinsic price trend. Building on environmental economics and financial market theories, this study reviews the design of carbon price stabilization mechanisms in China’s seven pilot ETSs and assesses their performance. The pilot ETSs have incorporated most price stabilization mechanisms recommended in the literature, including price ceiling–floor, intensity-based allocation, ex-post adjustment of allowances, intertemporal flexibility, and daily trading risk management. By examining this wide range of mechanisms, the analysis helps understand the different design options available to stabilize carbon prices. Furthermore, by decomposing carbon price data in the different pilot ETSs, the analysis helps evaluate the effectiveness of these mechanisms. However, we are cautious about the desirability of regulatory intervention for influencing carbon market prices.
About the speaker:
Dr. Wang obtains her Ph.D. in Economics at Wuhan University, China. Her current position is an associate professor at the School of Economics, Huazhong University of Science and Technology (HUST), China. She also shares experiences as visiting scholars at Duke University (2017.12 – 2018.11) and Australian National University (2014.12). Her research interests include climate and environmental policies such Emissions Trading System in developing countries, green innovation and technical change, etc. Her researches have been published on peer-reviewed journals such as Energy Policy, Climate Policy, etc.
The online seminar is organized for CUHK Law students to attend only.