Modelling Dependency Structures of Carbon Trading Markets between China and European Union: From Carbon Pilot to COVID-19 Pandemic

The exploration of the dependency structure Chinese and EU carbon trading markets is crucial to construction a globally harmonized market. In this paper, we studied characteristics structural interdependency between China’s major European Union (EU) market before after launch national emissions scheme (ETS) occurrence new coronavirus (COVID-19) by applying C-vine copula method, with prices EU, Beijing, Shanghai, Guangdong, Shenzhen Hubei as research objects. study shows that there exists statistically significant dependence in China their extremal dependences structures are different at stages. After ETS, has become more independent terms market, relevant domestic markets. Most importantly, found increased following outbreak COVID-19, tail existed ETS during COVID-19. results provide basis for understanding linkage stages, which turn can help regulators investors formulate investment decisions policies.