Abstract
Maintaining the stability of the carbon market is of great significance for China to meet its goal of "Double Carbon," but at the beginning of 2020 the COVID-19 pandemic emerged and the economy was greatly affected. A natural question is whether it impacted domestic carbon markets. This paper thus presents the event research method on eight carbon emission trading markets in China, because it can timely exhibit the benefits investors gained during the COVID-19 pandemic and also can overcome the difficulty of separating those benefits from the overall performance of the carbon market via high-frequency data. The results herein confirm that China's carbon market has reacted negatively to the COVID-19 pandemic, which mainly relates to the mandatory blockade and isolation policy adopted by the central government. The production and operation activities of enterprises decreased along with the demand for carbon quotas. Because of the panic, investors also had a negative attitude towards the carbon market, influencing the supply and demand curve of carbon quotas and causing a decline in carbon prices. Under the effectiveness of government epidemic prevention and control policies, we further find that the negative impact was gradually eliminated. Overall, our findings offer some important information for the decision-making of governments, carbon market investors, and policymakers.