A novel hybrid learning paradigm with feature extraction for carbon price prediction based on Bi-directional long...

An efficient carbon trading market can effectively curb excessive carbon emissions and thus slow down the pace of global warming, which heightens the necessity of improving the accuracy of carbon price forecasting. In order to overcome the weakness of previous prediction model that always trained data in one-way neural networks and propagated the data sequentially, this paper proposes a novel hybrid learning paradigm WPD-ISSA-BiLSTM combining wavelet packet decomposition (WPD), improved sparrow search algorithm (ISSA), and Bi-directional long short-term memory network for deep feature exploration of carbon prices. Firstly, WPD decomposes and reconstructs the original carbon price series into several independent subseries. Then, the input features of the all subseries are filtered with random forest to select the best input features for the prediction model. Finally, a Bi-directional long short-term memory network optimized by the ISSA is employed to deeply delineate the intrinsic evolutionary trends of carbon prices, and the prediction results of all subseries are superimposed on each other to obtain the final carbon price prediction results. The actual carbon emission trading prices are collected as input to the model, and the experimental results show that the RMSE values of the proposed model are 0.2516 and 0.2962 under the mild and severe volatility scenarios, respectively. The proposed model has superiority and robustness compared to the comparison model and several existing models and better understands the intrinsic correlation between historical carbon price data. The results of this study can provide meaningful references for the carbon market development and emission reduction pathways.