Research on the Correlation Between Chinas Green Bond Market and Carbon Market

The issues of climate change have attracted much attention around the world. This study investigates the correlation between Chinas green bond market and carbon market using continuous and discrete wavelets. For the green bond index and carbon market transaction prices during 2014-2024, we find that the correlation and dependence between the green bond market and carbon market are strong, with the green bond market exhibiting a stronger correlation and dependence on the carbon market in the low-frequency region, and this strong correlation becomes more pronounced after 2020. Carbon market transaction prices have preceded changes in the green bond index, and the implementation of relevant policies or the occurrence of special events may strengthen the correlation between the two markets. These findings reflect the importance of developing green economy markets to facilitate the gradual transition to a sustainable economy.