Carbon emission trading mechanism and practice in China:From the perspective of cost of equity capital
As an important mechanism for enterprises to reduce emissions and increase efficiency,the carbon emission trading market has aroused the attention of investors in the capital market on the carbon emission issue of enterprises,which may affect investors'risk assessment and value judgment of enterprises.By manually sorting out the list of emission control enterprises in various carbon emission trading markets in China,this paper finds that the carbon emission trading mechanism has significantly increased the cost of equity capital of enterprises listed in carbon emission trading markets.The main mechanism is that investors pay attention to carbon risk,but the market mechanism has obvious effect boundaries.It is further found that when the initial quota of the carbon market is partially auctioned and transactions are more active,the competition in the product market is higher,the air pollution in the city where the enterprise is located is more serious,and the non-financial performance of the enterprise is better,the carbon emission trading mechanism has a more significant effect on the cost of equity capital of the enterprise.The conclusion of this study is helpful to comprehensively evaluate the economic consequences of China's carbon market construction,and provide theoretical basis and empirical reference for the continuous promotion of this low-carbon environmental protection policy.
carbon emission tradingcarbon market mechanism designinvestors'attention about carbon riskcost of equity capital
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