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Characterizing the dynamic evolutionary behavior of multivariate price movement fluctuation in the carbon-fuel energy markets system from complex network perspective

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  • Chen, Weidong
  • Xiong, Shi
  • Chen, Quanyu

Abstract

This paper explores the dynamic evolutionary characteristics of the multivariate price movement in the carbon-fuel energy markets system by analyzing the topological features of our constructed multivariate price movement evolution network. Firstly, we find that the evolution pattern of the multivariate price movement modes of the carbon-fuel energy markets system has been generally almost fixed after a while, which suggests there exist the essential evolution laws of multivariate price movement modes. Secondly, we extract the essential evolution laws by motif analysis, showing that the transmission probability from the favorable community promoting the greenhouse gases emission reduction to the unfavorable community hindering the greenhouse gases emission reduction is not low, which could result in the occurrence of the “short-term effectiveness traps” in greenhouse gases emission reduction. Finally, we also find that when the evolution occurs within the modes with slight fluctuation of the carbon and coal price, its evolution process is favorable to greenhouse gases emission reduction. The results we obtained are totally new and open up a new perspective for market regulators in the carbon trading market.

Suggested Citation

  • Chen, Weidong & Xiong, Shi & Chen, Quanyu, 2022. "Characterizing the dynamic evolutionary behavior of multivariate price movement fluctuation in the carbon-fuel energy markets system from complex network perspective," Energy, Elsevier, vol. 239(PA).
    • Handle: RePEc:eee:energy:v:239:y:2022:i:pa:s0360544221021447
    DOI: 10.1016/j.energy.2021.121896
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    1. Liu, Jianing & Man, Yuanyuan & Dong, Xiuliang, 2023. "Tail dependence and risk spillover effects between China's carbon market and energy markets," International Review of Economics & Finance, Elsevier, vol. 84(C), pages 553-567.

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