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Blockchain Technology in Carbon Trading Markets: Impacts, Benefits, and Challenges—A Case Study of the Shanghai Environment and Energy Exchange

Author

Listed:
  • Guocong Zhang

    (School of Economics, Qingdao University, Qingdao 266071, China)

  • Sonia Chien-I Chen

    (School of Economics, Qingdao University, Qingdao 266071, China)

  • Xiucheng Yue

    (School of Economics, Qingdao University, Qingdao 266071, China)

Abstract

This study employs the Shanghai Environment and Energy Exchange as a case study to investigate the effects of blockchain technology applications on transaction prices within the carbon trading market. Utilizing an event study methodology, the research demonstrates that blockchain technology significantly enhances the transparency, security, and efficiency of the carbon market, thereby exerting a positive influence on transaction prices. Nonetheless, the study also identifies several challenges associated with blockchain applications, including increased costs, heightened energy consumption, transaction delays, and substantial learning costs. To mitigate these issues, the study proposes optimizing blockchain architecture, incorporating Layer 2 technologies to expedite transaction processes, and developing innovative regulatory frameworks.

Suggested Citation

  • Guocong Zhang & Sonia Chien-I Chen & Xiucheng Yue, 2024. "Blockchain Technology in Carbon Trading Markets: Impacts, Benefits, and Challenges—A Case Study of the Shanghai Environment and Energy Exchange," Energies, MDPI, vol. 17(13), pages 1-15, July.
    • Handle: RePEc:gam:jeners:v:17:y:2024:i:13:p:3296-:d:1429292
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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