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Sustainable Energy Consumption in Northeast Asia: A Case from China’s Fuel Oil Futures Market

Author

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  • Chi Zhang

    () (School of Economics and Management, Southeast University, Nanjing 211102, Jiangsu, China)

  • Zhengning Pu

    () (School of Economics and Management, Southeast University, Nanjing 211102, Jiangsu, China)

  • Qin Zhou

    () (School of Economics and Management, Southeast University, Nanjing 211102, Jiangsu, China)

Abstract

The sustainable energy consumption in northeast Asia has a huge impact on regional stability and economic growth, which gives price volatility research in the energy market both theoretical value and practical application. We select China’s fuel oil futures market as a research subject and use recurrence interval analysis to investigate the price volatility pattern in different thresholds. We utilize the stretched exponential function to fit the pattern of the recurrence intervals of price fluctuations and find that the probability density functions of the recurrence intervals in different thresholds do not show the scaling behavior. Then the conditional probability density function and detrended fluctuation analysis prove that there is short-term and long-term correlation. Last, we use a hazard function to introduce the recurrence intervals into the (value at risk) VaR calculation and establish a functional relationship between the mean recurrence interval and the threshold. Following this result, we also shed light on policy discussion for hedgers and government.

Suggested Citation

  • Chi Zhang & Zhengning Pu & Qin Zhou, 2018. "Sustainable Energy Consumption in Northeast Asia: A Case from China’s Fuel Oil Futures Market," Sustainability, MDPI, Open Access Journal, vol. 10(1), pages 1-14, January.
  • Handle: RePEc:gam:jsusta:v:10:y:2018:i:1:p:261-:d:127843
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Yongrok Choi, 2018. "Regional Cooperation for the Sustainable Development and Management in Northeast Asia," Sustainability, MDPI, Open Access Journal, vol. 10(2), pages 1-8, February.

    More about this item

    Keywords

    sustainable development; recurrence interval; probability distribution; memory effect; risk estimation;

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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