ABSTRACT
ABSTRACT: China’s economy has been developing rapidly, which has led to the growth of carbon emissions under the background of global climate change. This paper introduces the carbon option to perfect the carbon market mechanism and points out the necessity and significance of carbon option research. Because the carbon option has strict conditions for the Black–Scholes option pricing formula, this paper will use the Black–Scholes model to establish a carbon option pricing model, build a EUADEC-10–based option by the EU market data, and determine the option price. At last, it puts forward the countermeasures and suggestions for China to integrate into the global carbon market mechanism and participate in international climate negotiations, which provides research ideas for the construction of China’s carbon trading market in the future.
