Related Experiment Video
Updated: Aug 20, 2025
11:19
Measuring Carbon-based Contaminant Mineralization Using Combined CO2 Flux and Radiocarbon Analyses
Published on: October 21, 2016
12.0K
Correlation and causality between carbon and energy markets: a complexity perspective.
Jiuli Yin1, Yan Zhu1, Xinghua Fan2
1Center for Energy Development and Environmental Protection Strategy Research, Jiangsu University, Zhenjiang, 212013, China.
Environmental Science and Pollution Research International
|November 18, 2022
Summary
Global warming necessitates understanding carbon and energy markets. This study reveals the carbon market is less complex than energy markets, with significant information flow and a 50-unit time delay influencing their dynamic relationship.
Area of Science:
- Environmental Economics
- Financial Market Analysis
- Complexity Science
Background:
- Global warming drives the need to analyze carbon and energy market interdependencies.
- Understanding market complexity and causality is crucial for effective policy and investment.
Purpose of the Study:
- To investigate the complex relationship between Chinese carbon and energy markets.
- To quantify market complexities, identify time delays, and analyze causality.
Main Methods:
- Multi-scale fuzzy entropy to measure market complexity.
- Pearson correlation and detrended cross-correlation analysis to identify time delays.
- Transfer entropy to explore causality.
Main Results:
- The carbon market exhibits lower complexity than energy markets.
- Market complexity is higher at smaller time scales.
- A critical time delay of approximately 50 units maximizes market correlation.
- Causality varies: carbon market expectations influence oil, gas, and coal; electricity and new energy impact the carbon market; coal and carbon markets show cross-causality.
Conclusions:
- Significant information transmission exists between carbon and energy markets.
- Market participants should monitor interdependencies and dynamic complexity.
- Findings offer insights for navigating climate change mitigation strategies.
Related Concept Videos
01:14The Carbon Cycle
39.3K
Carbon is the basis of all organic matter on Earth, and is recycled through the ecosystem in two primary processes: one in which carbon is exchanged among living organisms, and one in which carbon is cycled over long periods of time through fossilized organic remains, weathering of rocks, and volcanic activity. Human activities, including increased agricultural practices and the burning of fossil fuels, has greatly affected the balance of the natural carbon cycle.
39.3K
01:27Correlation and Causation
38.0K
Statistical tests can calculate whether there is a relationship, or correlation, between independent and dependent variables. An indirect relationship of the variables signifies a correlation, while a direct relationship shows causation. If it is determined that no connection exists between the variables, then the correlation is a coincidence.
Correlation versus Causation
If the dependent variable increases or decreases when the independent variable increases, there is a positive or negative...
Correlation versus Causation
If the dependent variable increases or decreases when the independent variable increases, there is a positive or negative...
38.0K
00:51Energy Budgets
9.6K
Organisms must balance energy intake with the energy required for growth, maintenance and reproduction. These trade-offs result in a variety of survivorship and reproductive strategies, including semelparity and iteroparity. Semelparous species, like annual plants, have only one reproductive episode in their lifetimes and consequently have short lifespans. Iteroparous species, by contrast, have many reproductive events during their lifetimes but have relatively few offspring. These two...
9.6K
00:53Second Law of Thermodynamics
57.7K
The Second Law of Thermodynamics states that entropy, or the amount of disorder in a system, increases each time energy is transferred or transformed. Each energy transfer results in a certain amount of energy that is lost—usually in the form of heat—that increases the disorder of the surroundings. This can also be demonstrated in a classic food web. Herbivores harvest chemical energy from plants and release heat and carbon dioxide into the environment. Carnivores harvest the...
57.7K
04:10What is Energy?
51.3K
The universe is composed of matter in different forms, and all forms of matter contain energy. The different forms of energy on Earth originate from the Sun — the ultimate energy source. Plants capture light energy from the Sun, and, via the process of photosynthesis, convert it into chemical energy. This stored energy from plants can be harnessed in many ways. For example, eating plant products as food provides energy for our body to function, and burning wood or coal (fossilized...
51.3K
02:27Energy Basics
38.6K
Chemical reactions, such as those that occur when you light a match, involve changes in energy as well as matter.
38.6K