Research on carbon emission trading mechanisms: current status and future possibilities

In the year of 2005, the EU ETS came into effect. After then, carbon trading markets have been emerging across the world and a large number of studies have been conducted about the mechanisms of carbon trading. However, as an emerging market, carbon trading still faces many obstacles and needs more profound research support. For this reason, this paper reviews current related research progress on carbon trading market mechanisms, mainly including carbon emissions allowance allocation, carbon asset pricing and carbon price risk measurement. And then the paper discusses the limitations of existing research and puts forward some possible research directions in the future. Hopefully, the paper is helpful to better understand the research status and problems, and more importantly provide some references to optimise the carbon trading operations.